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ESOP conversion to PSP


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I know you said resource not a list but I will say the following (which maybe obvious sorry not trying to insult anyone's intelligence):

1)  Remember only an ESOP can have leverage in regard to the stock that is purchased.   So if there is still an acquisition loan this won't work. 

2) Remember if the company is an S corp a PSP would have to pay taxes on the flow through income every year.  Only an ESOP gets to not pay taxes on the flow through income.   So if you have an S Corp ESOP and are planning on keeping the stock in the PSP this will tend to kill the idea. 

Just a couple of thoughts. 

I would poke around the NCEO website and ESOP Association's website for resources that you are looking for.   They both have a large amount of free information and published information for sale on ESOPs.  

I might be biased but unless the company is a C Corp and the sponsor really wants to use some kind of highly biased allocation method (some method that uses age/service to skew the benefits towards the HCEs that require all the best testing methods that ESOPs can't use) an ESOP is better for company stock than a PSP.   That is why there are so many more ESOPs than PSP that own most or all of a company's stock.  

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