Employee Stock Ownership Plans (ESOPs) are the most common and successful employee ownership model in the U.S. and have become a popular alternative to traditional M&A transactions for business owners looking to exit – either partially or completely – in a tax-advantaged structure that transitions ownership to employees over time. Among businesses that are classified as government contractors, providing some level of employee ownership has been accepted by both large and small players in the space. In fact, the U.S. Government Accountability Office found that between 2014 and 2017, the Department of Defense issued almost half of its obligations (on contracts with annual obligations greater than $150,000) to companies that had ESOPs in place.
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