Building a Legacy Through Employee Ownership
In a marketplace increasingly dominated by consolidation and private equity, Employee Stock Ownership Plans (ESOPs) offer a powerful succession strategy that enables business owners to preserve the culture, talent, and purpose that have contributed to their success.
Grassi knows what it takes to implement and sustain a successful ESOP, because we live it ourselves. Since becoming an employee-owned firm in 2023—now recognized as the second-largest ESOP-owned CPA firm in the U.S.—Grassi has embraced the shared purpose, accountability, and long-term vision that define employee ownership. From the initial transaction to ongoing governance, we understand the complexities and advantages of the rewarding ESOP structure and apply deep expertise in financial, operational, and organizational nuances to support your company’s unique employee ownership goals.
What is an ESOP?
An ESOP is a qualified retirement plan that holds company stock in trust for the benefit of employees. Unlike private equity or third-party sales, ESOPs facilitate a gradual, values-driven ownership transition, preserving your company’s independence and long-term stability.
Why Choose an ESOP?
Choosing to transition ownership to your employees allows you to:
- Exit on Your Terms: Control the timing and structure of your transition, with the flexibility to remain involved as desired.
- Create a Market for Your Business: Expand your succession options, even in the absence of traditional buyers, and be financially rewarded through a structured transaction.
- Unlock Tax Savings: Explore available tax-deferral opportunities (such as the Section 1042 rollover for C-Corps) and tax-exempt income potential for S-Corp ESOPs, along with tax-deductible contributions toward ESOP debt.
- Preserve Culture and Purpose: Transition ownership to those who know and value the mission: your employees.
- Strengthen Employee Retention and Engagement: Inspire loyalty and enhance employee performance by rewarding them with a meaningful stake in the company’s success.
- Maintain Business Continuity: Reassure clients, partners, and employees with a stable leadership transition and long-term commitment.
Our ESOP Services
Our deep expertise across the complexities, requirements, and nuances of employee ownership enables us to guide businesses through every stage of their journey—from exploring ESOP options to achieving sustained success as an employee-owned company.
Our services include:
- Feasibility Analysis: Assess your company’s readiness for an ESOP by evaluating valuation potential, financial capacity, and regulatory compliance.
- Deal Structuring: Design deal terms and ownership structures that align with your succession, tax, and legacy goals.
- Financing Strategy: Identify and structure funding sources—including debt, equity, or hybrid models—to support a sustainable and successful transaction.
- Audit and Financial Statement Review: Ensure compliance with ESOP-specific accounting and reporting requirements.
- Tax Strategy & Compliance: Apply available tax benefits while maintaining compliance with IRS rules and Generally Accepted Accounting Principles (GAAP).
- Stakeholder Coordination: Collaborate with trustees, legal counsel, third-party administrators, and financial partners to streamline execution and governance.
- Annual ESOP Valuation Support: Provide strategic guidance for required annual ESOP trust valuations, helping maintain transparency and long-term value.
- Ongoing Strategic Support: Offer continued advisory services to help align your ESOP with evolving goals and best practices
Why Grassi?
At Grassi, our dedication to independence and shared success defines how we serve clients who share our vision. As active members of the National Center for Employee Ownership (NCEO) and The ESOP Association, we bring a nationwide perspective and ESOP expertise to businesses in construction, architecture and engineering, manufacturing and distribution, life sciences and biotechnology, healthcare, professional services, and more.
Insights from Grassi’s ESOP Experts
Discover our latest thought leadership on ESOP strategy, succession planning, and the benefits of employee ownership.