Be Careful Who You Select to Perform Your ESOP Valuation.

Monday, June 30, 2014

The Wall Street Journal raised awareness this past week on the fact that the Department of Labor (DOL) is increasing scrutiny on Employee Stock Ownership Plans and the ways that these companies have been valued.  In the past, a few valuation companies have inflated per share values to meet business owners requests at the expense of the employees who owned shares as part of the employee stock ownership plan.     

Click here to read this article from the Wall Street Journal.

As a Trustee of an ESOP, be careful when selecting a valuation firm to work with in performing the annual business valuation.  Below is a checklist to help guide you in the selection of a valuation provider:


  1. Does the valuation firm have the proper designations and credentials to perform the type of business valuation requested?
  2. How many business valuations does the valuation firm perform annually?
  3. Is the valuation firm a member of the ESOP Association and/or NCEO to stay on top of the changing valuation requirements for ESOP companies?
  4. What other services does the valuation firm provide?  Are there any potential conflicts of interest?