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One of the biggest issues today for ESOP companies is the handling of the repurchase of ESOP shares. As large as this issue is today, it will only grow in significance because:
More ESOPs are becoming mature
More ESOPs are moving to 100% S corporation status
So, basically, all of the stock of ESOP companies are subject to the ESOP put option which the company must honor. One very large challenge is to properly account for this contingent liability in the valuing of the ESOP shares. This session makes transparent the various valuation methods to handle this. In addition, this teleconference explains the remedies available to ESOP sponsor companies in amending their plans to help deal with uneven demands on cash flows.
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