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Thought Leadership

Speaker, "How to Manage ESOP Repurchase Liability and Contributions During Uncertain Times," National Center for Employee Ownership 2021 Employee Ownership Conference

Speaking Engagements

Mark Welker co-presented "How to Manage ESOP Repurchase Liability and Contributions During Uncertain Times" at the National Center for Employee Ownership's 2021 conference on April 20, 2021.

Many sponsors of mature ESOPs are unsure about how to time distributions; whether to require diversification (segregation) of terminated participants' undistributed stock; how best to pay for repurchase liability (recycling vs. redemption); and whether (and when) to consider re-leveraging. They may not understand the impact of those decisions on short-term vs. long-term ESOP participants and on active vs. terminated participants, or the impact of those decisions on their synthetic equity, such as stock options, stock appreciation rights, and phantom stock. 

The presentation dispelled many mature ESOP myths: that delaying repurchase liability as long as possible is best, that you can’t make your repurchase liability schedule flexible, that recycling can result in contribution rates that cost too much, that re-leveraging is the best solution and others. Mark laid out an example of a solution that seems to work for the majority of mature ESOPs and provides cash flow flexibility to address your uncertain cash flow future.


Mark D. Welker