HI Bill
Thinks s/he gets paid by the post
- Joined
- Dec 26, 2017
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- 2,557
My former consulting/engineering/environmentla/construction company has been privately held as an Employee Stock Ownership (ESOP) company under Subchapter S for some 35 years. They recently decided to go public, and have filed a draft notice with the Securities and Exchange Commission.
If they go public, the impact on the ESOP participants is that the shares that they hold will be converted to shares at publicly traded prices. Under the distribution rules of the ESOP, if you leave the company before age 62, you can't receive any buyouts until at least age 62. If you have over a certain amount in the ESOP, the buyout will be made in either three or five annual payments, based on the stock price during each distribution.
I will have to wait another 9 years to start the buyout process. I was wondering if any forum members have been through this process, and whether the ESOP shareholders are likely to lose, gain, or break even, and if there are any major issues I should watch out for? Since ESOP shares represent 20% of my retirement assets, this is a fairly major concern.
I have no control over any of this, but am wondering if I should work longer to mitigate the possiblity that the ESOP payout after IPO conversion is significantly less than current value. It seems that under Subchapter S, the company hodling the ESOP has a responsibility to maintain the share value, and is subject to being sued if they don't, so maybe I should not worry?
Thank you!
If they go public, the impact on the ESOP participants is that the shares that they hold will be converted to shares at publicly traded prices. Under the distribution rules of the ESOP, if you leave the company before age 62, you can't receive any buyouts until at least age 62. If you have over a certain amount in the ESOP, the buyout will be made in either three or five annual payments, based on the stock price during each distribution.
I will have to wait another 9 years to start the buyout process. I was wondering if any forum members have been through this process, and whether the ESOP shareholders are likely to lose, gain, or break even, and if there are any major issues I should watch out for? Since ESOP shares represent 20% of my retirement assets, this is a fairly major concern.
I have no control over any of this, but am wondering if I should work longer to mitigate the possiblity that the ESOP payout after IPO conversion is significantly less than current value. It seems that under Subchapter S, the company hodling the ESOP has a responsibility to maintain the share value, and is subject to being sued if they don't, so maybe I should not worry?
Thank you!
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