On the ESOP topic I will say I had a friend that still owns part of an ESOP. His father started it. He was lucky to have a group of employees that was eager to buy into the company. Last count I got from him more than 10 people have retired with at least a million dollar buyout. Every ESOP owner is required to sell their shares when they leave employment no matter the reason. It is a good company. They still have all the same issues we all do. Some buy in because they think it is an easy ticket to get paid but not have to do as much. They find out different. All in all, if you have a very tight nit core group than can agree on the initial formation docs and have a well thought out ESOP ByLaws it can be a grand thing in which everyone, including the original founder, are treated fairly.
If you run a great business with great people, especially if your kids aren't interested in your business, then I think this is fantastic. On Sun, Aug 23, 2020 at 8:53 AM Lewis Bergman <lewis.berg...@gmail.com> wrote: > We did what most people would call profit sharing. I didn't view it as > profit sharing for the simple reason that I always matched 100%, even when > we didn't make a profit. Same with bonuses. If someone deserved a bonus, > sometimes that didn't show up in the bottom line but they got it anyway. > > I am not making any judgements either way. I don't feel like I owed my > employees anything because I paid them a great wage and treated them better > than most other employers I was competing with. Days off, flexible work > schedules, good pay. Not saying someone who feels they should pay their > employees on a buyout isn't doing that, just that I know I did. > > At any rate, someone asked a question on how to actually get that employee > payment done in a tax advantage manner. I guess regardless of the formation > type (C or S) payments to employees are going to be reflected as an expense > in the year you sell and should offset gains. If it is an asset sale as > most are there may be a difference in the calculation as capital gains are > offset by capital losses and salaries aren't in that category. > > On Sun, Aug 23, 2020 at 8:04 AM Matt Hoppes < > mattli...@rivervalleyinternet.net> wrote: > >> Is it common? No >> >> Why isn’t it common? I have no idea. >> >> Yes I as the owner took the risk. But X Y and Z employees have been here >> with me for the past 30 years and kept things running. >> >> Shouldn’t I be grateful for what they helped me build? >> >> Like I said - I’m not judging anyone who makes a decision one way or the >> other. But to me it doesn’t seem right to say “thanks for 20 years of >> dedicated service and helping us make millions, go find another job now”. >> >> On Aug 23, 2020, at 8:51 AM, Steve Jones <thatoneguyst...@gmail.com> >> wrote: >> >> >> Is that a common thing in businesses? Employees getting a cut of a sale? >> I could see the purchaser giving a retention or severance, but I d9nt see >> how an employee would be entitled to anything more than a handshake or kick >> in the pants >> >> On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes < >> mattli...@rivervalleyinternet.net> wrote: >> >>> Lewis, >>> It’s your business and you can do what you want to with it and I won’t >>> judge anyone for that. >>> >>> We do do profit sharing at the end of the year. >>> >>> I guess it’s just a different cultural approach to business, while it’s >>> true I do have all the risk, we wouldn’t be anywhere even close to where we >>> are today if it weren’t for the dedicated employees and that I have. Yes >>> some of them are high maintenance, but they bring talents and ability to >>> the company that has kept it moving forward. >>> >>> On Aug 23, 2020, at 8:09 AM, Mark Radabaugh <m...@amplex.net> wrote: >>> >>> Or do the compromise between you and Matt - the ESOP where the >>> employees end up owning it. You get nearly the same money out and they >>> eventually get the same deal - if they can keep it going and build it. >>> It’s harder because you have to figure out how to both get it to cash out >>> and build at the same time. >>> >>> Mark >>> >>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman <lewis.berg...@gmail.com> >>> wrote: >>> >>> This isn't the feel good kumbaya that might be popular, but I'll say >>> this on the subject of division of profits: >>> I started my WISP by myself. All of you who started with your own >>> checkbook and sweat know what that took. My family sacrificed as I worked >>> massive hours. I did everything from accounting to server builds >>> maintenance to installs and tech support. All while I was making about 1/3 >>> of minimum wage while I did it. We lived off my wife's school teacher >>> salary. >>> >>> I did that for a pretty short time as we had some early success and >>> after a couple of years I started hiring people. By the time I sold I did >>> what I wanted when I wanted. The people I hired I paid better than average >>> hourly wages for the job and gave bonuses paying them for their work as >>> they did it. I never asked any of them to sacrifice like I did nor did they >>> offer. >>> >>> I took all the risk. If we failed I was the one in financial ruin. They >>> could all walk away inconvenienced but fairly unscathed while I was >>> personally liable for all company credit cards, vendor payments, carrier >>> contracts, etc. >>> >>> And of course you can tell where this is going. Myself and the other >>> shareholders kept every dime and I sleep fine at night. I worked to help >>> get all the best employees jobs. Sure some were angry because they somehow >>> felt they deserved something. Those were also the same employees I could >>> have and probably should have already gotten rid of as they were problem >>> children. Risk and reward. I took the risk, I get the reward. You want >>> rewards? Take the risk. >>> >>> I did give a few people bonuses, help setup two in related businesses >>> without loans (funneled business their way) but it was not any kind of % or >>> really all that significant.I did that because they had been good people >>> first, hard workers second, and last but not least, made my life easier >>> when we were doing our thing. >>> >>> I am a capitlist and make no apologies for it. >>> >>> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes < >>> mattli...@rivervalleyinternet.net> wrote: >>> >>>> Now that I think about it - I wonder if my plan of C would be a way to >>>> reduce income taxes too on the amount received? >>>> >>>> Either by funneling the money through the company and paying the >>>> employees or having the buying company write a check to each of the key >>>> employees. >>>> >>>> I’m not sure which would yield better results for everyone. >>>> >>>> The way I look at it though - I don’t have hard partners. That often >>>> leads to problems. But everyone who sticks with the company and especially >>>> if they make a career out of it should be compensated nicely - both each >>>> year out of proceeds they helped make as well as out of a major sale if it >>>> ever happens. >>>> >>>> If anyone here has ever worked for a company where the owner sold and >>>> got 2 million and you had worked there for 10 years building it up —— well, >>>> how did you feel? Slap in the face. >>>> -- >>>> AF mailing list >>>> AF@af.afmug.com >>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>>> >>> >>> >>> -- >>> Lewis Bergman >>> 325-439-0533 Cell >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >>> >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> > > > -- > Lewis Bergman > 325-439-0533 Cell > -- Lewis Bergman 325-439-0533 Cell
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