ESOP Distribution Options - ESOP Benefit Distribution Options
  • 888.SES.ESOP

ESOP Benefits Distribution Options

Home » ESOP Knowledge Center » ESOP Benefits » ESOP Benefits Distribution Options

ESOP benefits distribution outlines how the benefits of an employee stock ownership plan (ESOP) are distributed. ESOP benefits distribution may be made in cash or in company stock, subject to the put option.

ESOP distribution rules state that ESOP participants must be given the right to require a distribution of their ESOP account balances in the form of company stock, unless the company’s organizational documents restrict ownership of company stock to active employees, or the company is an S corporation. In these cases, ESOP benefits distribution comes in the form of cash or company stock which must be immediately resold to the company.

ESOP benefits distribution can appear in a lump sum or in installments. If installment ESOP benefits distribution is available, the minimum distribution period may not exceed five years. ESOPs are one form of employee participation in corporate ownership, offering compelling benefits to selling owners, companies and employees.

Ready to Move Forward?

If you would like to learn more about how SES Advisors can guide you through the complexity
of exploring and installing an ESOP, please contact us.
Contact Us
Is an ESOP right for you?