Financing ESOPs: ‘The Banker’s Perspective’
ESOPs are about the relationship between employees and their employing company. A company’s decision to establish an ESOP may be influenced by corporate finance issues. However, a company may choose to deliver shares to employees for its own commercial reasons irrespective of other considerations. The decision to establish an ESOP involves many components. A bank might be involved at the early stages, say, when the ESOP is being compared with other techniques for managing employee relations or at the final stages when the question outstanding is the price for ESOP finance. The wider issues are considered elsewhere in this book. This chapter is restricted to the financing of an ESOP Trust by a bank and focuses on the lending banker’s perspective.
KeywordsShare Price Corporate Finance Strike Price Lending Bank Employee Share
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