Deductibility of ESOP contributions. The deduction limits for an S corporation ESOP are the same as for nonleveraged C corporation ESOPs, even if the ESOP is leveraged. Other benefit plans. If the employees are also covered by a defined benefit plan, an additional overall deduction limit may also apply. The ESOP fiduciary votes the ESOP shares.
Fiduciaries sometimes hold the dual role of management and fiduciary.
In everyday practice this means that ESOPs do not have to change the way a company is governed, even if they own all the shares. Management or the board, for example, can still control the company. Companies that do give employees full voting rights, however, rarely find that this makes a great deal of difference in governance, because employees tend to be very conservative shareholders. All rights reserved. How to Order Use our online order form for secure, instant ordering.