AVANTAGES AND DISADVANTAGES OF ESOPs
01.Core Concepts
DISADVANTAGES ADVANTAGES • Dilutes ownership • Costs (admin, payouts, appraisals) • No SS integration • Creates a market • Helps EE retention and loyalty • Improve cashflow Employer • Bears risk of ER insolvency • Value subject to appraiser • Not liquid • Creates ownership • NUA • Put option Employee EE = Employee; ER= Employer