Employee stock ownership Puns

I interviewed with a 100% employee owned company today for an internship position and they were telling me a benefit of working full time there is their ESOP. When I asked how it works, they told me that 10-15% of your salary is paid out in company stocks. Theoretically speaking, say I make $75,000 a year. Does this mean that $7,500-$11,250 of my salary wouldn’t be available for me to spend because it’s tied up in company stocks?

This is my first year working for an ESOP - I was informed by HR that I have the chance to place (reinvest?) my money that would be awarded to me from the PSP back into the ESOP. Passive election is set to send that profit sharing money toward the PSP account managed by John Hancock. Or, I could choose to take the profit sharing money and use it to buy more company shares.

Our company stock has soared the last 3 years, but there’s been grumblings that it may not rise as quickly this year (we’ve had a meh year, and I would know working in commercial development). I’m not too sure why I would chose allocation of my PSP from one account over another - is it based on my optimism/tolerance of risk that the value of my ESOP shares could continue rising faster than a MMF run by JH?

Is there anything I can check when comparing one option versus another for ROI?

I’m going to hand-waive some tax considerations for now since I assume if I liquidate either I pay tax on the exiting of those JH/ESOP accounts.

EDIT: I’m 27, love where I work, and want to rise in my career here if possible but am willing to walk away if I find something better elsewhere. Not sure how rollovers work between job transitions with one account or another.

I read another poster's tale of working at an ESOP so I thought I would share mine. OP's story seemed to turn out well. Mine is the other kind.

For a bit of background, an ESOP is billed as a form of employee ownership. I imagine it to be what happens when a pension and a 401K have a baby. The company takes revenue and puts it into a pool which is split up into shares. If an employee meets certain criteria (hours worked, etc.), they are issued shares of stock from this pool. Every year a 3rd party auditor looks over the books and issues a stock price. The stock is payed out when an employee leaves or retires. For tax/financial purposes, it has rules similar to money placed in a 401K/IRA.

The company I worked for exists in a highly regulated industry with massive barriers to entry. The license to operate is a license to print money. The original owners wanted to offload the business after a making a killing for about 2 decades. They had a rather inflated asking price and couldn't find anyone interested.

What to do? Enter the general manager. The employees can purchase the company from us at our inflated price! The og owners floated debt to the company to facilitate the sale. Wait, that's robbing Peter to pay Paul.

Au contraire. The general managers first step? Sell off all of the company's physical assets to pay off a large portion of the debt! After all, the license to operate is the only thing of real value. The assets were sold for just under 50% of the sale value. This is important since ESOP regulations stipulate that employees get to vote on certain decisions. One of them being a sale of the majority of the business or it's assets. Whew! Just skirted that line.

The GM's next step? Move the company's headquaters to a strip mall 15 minutes down the road. After all, I own a vacant strip mall. The employees can pay my mortgage! Plus, it's in another state. Oh, the layers of obfuscation!

What else can I do? Hey, I have a friend in finance. We can transfer all of our 401K business to them! The finance friend's spouse also just so happened to be working in the accounting department of our company.

What's that you say GM? A quasi competitor in the local area is looking to buy our company? They are backed by a billionaire? The sale is contingent on certain legislation passing? I don't know what contingent means, but shit. That sounds great! Company stock to the moon!!!!

Hey! Where are you going GM? You got appointed to a respectable position in the j

So I left my position at Sheetz back in February of this year and in the mail today I received a letter showing I own about $500 worth of stock in Sheetz because of this program. Does anyone know how I can go about accessing these stocks as it included no information regarding that.

I work for a privately owned, medium-sized engineering consulting firm which is planning to set up an ESOP. The firm is not planning to match any contributions to incentivize purchasing shares.

I'm fully on board with index investing so I don't plan to purchase any shares. I am however new to investing and unfamiliar with ESOPs so I had a couple of questions:

• My main question is, are there any good reasons to participate in an ESOP with no matching contributions? I can think of a ton of reasons why this type of ESOP is beneficial for the employer but I struggle to think of any benefits for employees. My thinking is that this reduces diversification in your financial portfolio.

• The company tried to sell the plan by saying that unlike the stock market, the value of the shares won't fluctuate at a whim. They also tried to state that the company's share value had a average year-over-year increase of 20%, compared to about 10% in the stock market. I've read many of the books recommended on this sub so this sounded like complete bunk to me, however I was curious about how ESOPs for private companies actually worked. For example, how exactly is the book value of a private company determined? Wouldn't it be easier to manipulate data to inflate the book value of a private company as opposed to public companies trading on the stock market, where I'm assuming the accounting is more scrutinized?

https://twitter.com/AmSolidarity/status/1349193250784083969

I have a hair over $50K in an employee stock ownership plan (ESOP), all of which was employer contributed. I am eligible to withdraw the funds or roll them over (or do a combination of the two). I have about $29K in unsecured debt (long story short, I had employment issues and rather than doing bankruptcy I'd rather pay the debt with this).

Is there an ideal way to get the best tax treatment for this? Obviously the more I reinvest the less the tax burden (and potentially I'll get some of the 20% withheld tax back). If I could work out the exact math I could automatically rollover the excess which would not be taxed at all. But wasn't sure if I was missing anything else I could do. I'm under age 50, FYI.

Thoughts or suggestions welcome. =)

Throwaway because of personal information.

The company I work for offers a 3% automatically to 401k (each paycheck) and an additional 12% into privately held company stock (one time transaction at end of year). On top of that I contribute 12% on my own to the 401k and get close to maxing out a Roth IRA on the side (slightly greater than 15% pre-tax contributions summing it up).

My question is related to how I should handle this 12% employee stock ownership program as it is essentially another retirement fund (penalties for withdrawing early). There is the "rule of thumb" to contribute 15% of pre-tax income to retirement and I was going through the flowchart in the "I have x how should I spend it" wiki but am confused on how I should think about this 12%. Should I just treat it as icing on the cake?

I'm still young and single and I'm thinking about starting to save more aggressively for a down payment for a house. Should I be focusing on maxing out 401k and Roth IRA first before thinking about saving for the large downpayment? Or am I currently saving too much (I know it sounds silly) for retirement and I should focus on some of my shorter term savings goals?

Ok, so an employee stock ownership group is a valid S-corp shareholder, right? But because of the changes last year the EIN may not be the responsible person for the S-corp, a human is still required for that with either an SSN or an ITIN, correct?

Any citations that I could look at to learn more?

A recent post on this sub found the wallet that holds about $40m in LRC tied to a contract named Employee Token Ownership.

The original thread makes the charge that there is a massive employee sell off of their LRC.

I dug into the source details and didn't see that behavior at all.

I saw some employees selling and actively trading their LRC by moving their tokens into on exchange accounts (Binance mostly).

I saw some employees holding massive positions in LRC in cold storage.

I saw some employees moving their LRC to exchanges where they could participate in lending or liquidity pools.

One of those exchange being the Loopring Exchange.

I find all of this reassuring and bullish.

Sharing my DD. Someone poke holes in this if I'm wrong.

DD Below...

I want to know the truth of all things Loopring. And if there were a massive employee sell off, I'd like to understand that as well.

I don't think that's what's going on here, but I'll follow the source data.

Substantiating this is is the "Employee Token Ownership Plan"

Click the Contract tab and it will show the Contract Name as EmployeeTokenOwnershipPlan

There are over $40.5 mil of LRC in this wallet, so it's probably a safe bet based on the contract name and amount held that this wallet is used for this purpose.

Contract Tidbits

The contract source code has a besting period + 60 days built into the contract. Variables under Read Contract of VestPeriod = 63072000 and VestStart = 1594369474

If VestPeriod is in "ticks" or a Unix timestamp, that equates to the 07/10/2020 (UTC).

It looks like the first deposit to the wallet was on 07/10/2020, so that all syncs up.

Transactions

The volume of transactions has been relatively steady until November 2021 where there was an uptick in transactions.

The transactions appear to be LRC being moved into the contract then being transferred out to other wallet address.

Receiving Wallets

There are 13 unique wallet addresses listed as receiving these transfers.

Then if you dig into each transfer and the receiving wallet details you see most are transfers into other wallets for long term storage and some are transfers into exchange accounts (ostensibly to make available for sale). Some have positions in other crypto.

I'll break down each receiving wallet below, so you can dig in with your own eyes.

Conclusions

Daniel Wang has said in the past that most employees take payment in the form of Loopring. If you look at these distributio

So I am currently juggling a couple of different job offers. One of them offers an Employee Stock Ownership Plan (ESOP). I have never worked with a company that has offered this as an option. Are there any special tax advantages that go along with this type of plan? Are there any pitfalls to the plan that I should be aware about/ask about?

This company separately offers a 401(k) plan with a 20% contribution match with no cap on it. So the 401(k) program and this ESOP are totally separate.

Hi there,

I want to calculate the benefits of enrolling in my company's stock ownership plan. I'm reading articles online and they're saying it's free money and I should contribute as much as I can. While true, I'm uneasy because investing so much money into one company's stock seems risky for me.

I can contribute up to $3,250 per year, with my employer matching 50% ($1,625). This matching contribution would be considered a taxable benefit. My combined marginal tax rate is 29.65%.

How much can the stock price drop and I can still breakeven? If there's no taxes, then it would be a 33% drop. What about with taxes?

Also, would opportunity cost play a role in the breakeven calculation? if I instead were to put the $3,250 into a high interest savings account of 2.5% (Tangerine), how much can the stock price drop and I can still break even?

Thanks for any help!