ESOP vs. EOT: A Comparison Guide
Common Trust
Article · 15 min read · For: Owners / executives, Trainers / facilitators
A comparison of the two most common US employee ownership structures. Written by an EOT firm, so read it with that angle in mind, but it lays out the trade-offs clearly enough to start the conversation with an advisor.
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Problems it helps with
- Everyone tells me to do an ESOP but I'm not sure it fits
- I don't understand the difference between owning shares and sharing profits
- Our advisor only knows one model
- I need to explain to my team why we picked the model we did
What it covers
- How each model holds shares and pays employees
- Differences in setup cost, regulation and ongoing administration
- Where each model fits by company size and goals
- Governance and permanence of ownership
Topics: Ownership models