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Mini-cast 241: ESOP Advisors & Site Visits

The EsOp Podcast: ESOP Advisors & Site Visits

Bret Keisling was recently asked at a meeting of employee owners how often ESOP professional advisors should make site visits to their clients' companies. Drawing on his seven years as an ESOP trustee, Bret shares his views on the importance of annual (or more frequent) site visits for trustees, third party administrators, valuation advisors, and even the ESOP lawyers.

Site visits serve several purposes including giving insight to the professionals of how the ESOP is perceived by the owners. Perhaps more importantly, it reinforces to the employee owners that the advisors are real professionals who are working for the best interests of the employee owners and the company itself.

... or watch the video below.


Mini-cast 241 Transcript

[00:00:00] Bret Keisling: Welcome to the EsOp Mini-cast. Thank you so much for listening. My name is Bret Keisling and, as it says on my business cards, I'm a passionate advocate for employee ownership. This is our final Mini-cast during Employee Ownership Month 2023. I've loved seeing all of the companies celebrate their employee owners and the company themselves throughout social media. It's a great opportunity to see what so many companies are doing so well.

[00:00:34] I had the pleasure of appearing as a guest via Zoom at several employee owner meetings, and I particularly loved the question-and-answer portions of my presentations.

[00:00:43] One question struck me as very important. So, I wanted to chat about that for just a few minutes today. I was asked my opinion about how often ESOP professional advisors should do site visits, specifically with the employee owners themselves.

[00:00:59] My views developed over my seven years as an ESOP trustee, where I came to believe that engaging directly with employee owners was a critical part of my job. As regular listeners and those familiar with ESOPs probably know, the trustee's fiduciary duty is to act at all times in the best interests of the participants, which are, of course, current and sometimes former employees of the ESOP.

[00:01:22] I found the site visits, where I had the opportunity to meet with the employee owners, to be a very important part of how I did my job. First of all, by putting a face to the trustee, it reinforces for the employee owners that there's a real person or people acting in their best interest.

[00:01:38] I was surprised to talk to one company where an employee said in their eight years with the company they had never met or even seen the trustee. This relegates the trustee to an almost mythological position, as opposed to a real person that the employee owners can count on.

[00:01:54] Now, I understand that every trustee firm handles things differently, but when I was a trustee, my partner and I thought it's so important to be on site at least annually, and often more frequently, that we wouldn't charge an extra fee for these visits. To be sure, there were travel expenses, et cetera, but we looked at the site visits as just part of our annual engagement.

[00:02:14] I had a number of clients where I showed up onsite and employee owners and I would recognize each other and catch up from previous visits. And it gave me an opportunity to get real-time feedback from the very people whose interests I was looking out for.

[00:02:29] I think it's also important for your third-party administrators to visit the company at least annually and present at employee owner meetings about record keeping, vesting, disbursements diversification, and similar issues. This is complicated stuff, and it helps if there is a repetition in the presentations.

[00:02:48] I think it's also valuable that the valuation advisors meet with the employee owners from time to time to offer a primer on everything that goes into the valuation process. Although less critical, because of its technical and wonky nature, I'd also invite the ESOP lawyers occasionally to answer any questions the employee owners may have about relevant legal issues related to the ESOP.

[00:03:10] It's just my opinion, but I think annual visits from the third-party administrator and valuation advisor, and possibly the lawyers, coupled with annual, semi-annual, or even quarterly visits from the trustee will reinforce to the employee owners that these professionals are looking after their interests and will help them gain a better understanding of the company, its employee owners, and issues of current importance.

[00:03:34] So, if you haven't had your professional advisors visit your ESOP ever, or not in a long time, I'd made plans to schedule them to come in. This can be done at any meeting of the employee owners, although a natural time would be connected to when annual statements are released.

[00:03:49] That's my quick take on the importance of having your professional advisors come on site and meet with the employee owners. Reach out to your advisors and find a schedule that works well for the company and for the advisors. I think it will do a great job to reinforce so many important issues with the ESOP.

[00:04:07] With that, we'll wrap up this episode of the Mini-cast. Thank you so much for listening. My name is Bret Keisling. Be well.


[00:04:14] Bitsy McCann: We'd love to hear from you! You can find us on Facebook at EO Podcast Network and on X [Twitter] @EsOpPodcast. This podcast has been produced by Bret Keisling for the EO Podcast Network. Original music composed by Max Keisling. Branding and Marketing by BitsyPlus Design. And I'm Bitsy McCann.

Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.

A note on the transcript: This transcript was produced by Descript, an automated transcription service. While it has been reviewed by The EsOp Podcast, we cannot guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.


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