A retirement plan that runs on company stock can turn into a company’s next liquidity crisis — and U.S. accounting rule-setters are weighing whether businesses should be forced to spell out the size and timing of those buyback bills.
The issue centers on employee stock ownership plans (ESOPs), a common way for private-company founders to sell their businesses to workers as they head for the exits. The pitch is easy to understand: employees build retirement wealth with company stock, and owners get a tax-advantaged path to succession. The catch can be harder to spot — and far more expensive.
To dig deeper, visit the original article on the Thomson Reuters blog.