The valuation of an ESOP is generally more complex than that of a company with conventional ownership. An ESOP valuation must correctly incorporate all of the traditional business valuation
issues relating to fair market value, control premiums, liquidity discounts, tax pass-through status and other factors.
Further, an ESOP valuation must be able to withstand challenges by an employee, the IRS or the U.S. Department of Labor, which administers the ERISA regulations for ESOPs. Those regulations add the “adequate consideration” standard to the fair market value standard of IRS valuation review.
Kotzin Valuation Partners works closely with other ESOP advisors and administrators, from initial feasibility analysis and preliminary valuation through final valuation and annual updates. Our valuations and reports meet all federal standards for independence and documentation, and we fully satisfy the Uniform Standards of Professional Appraisal Practice.