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An employee stock ownership plan (“ESOP”) is a compensation plan in which the company contributes its stock for the benefit of the company’s employees. In addition to incentivizing and empowering employees, ESOPs also provide a number of tax advantages to plan.

ESOP Feasibility Studies and Valuations

  • Valuations for Annual ESOP expense
  • ESOP expense maintenance
  • Fairness Opinions for the Implementation, Sale or Termination of ESOPs

 ESOP Expense

We have valued instruments that are subject to vesting conditions including earning targets, share price targets, total return targets and, of course, time-based vesting. We value stock options and other equity based compensation for various purposes:
  • Financial reporting, principally under ASC 718
  • Divorce settlement agreements
  • Other tax-related purposes

We apply a wide range of valuation techniques, including:

  • Closed form models such as Black-Scholes-Merton
  • Lattice models, such as a binomial model
  • Synthetic option modeling
  • Monte Carlo simulations

Other stock-based compensations:

Stock Appreciation Rights
Phantom Stock
Restricted Stock


An Employee Stock Purchase Plan (ESPP) is a program in which employees can purchase company shares at a discounted price. Employees contribute to the plan through payroll deductions, which build up between the offering date and the purchase date. At the purchase date, the company uses the accumulated funds to purchase shares in the company on behalf of the participating employees. The amount of the discount depends on the specific plan but can be as much as 15% lower than the market price.