Employee Stock Ownership Plan (Private company)

munch008
munch008 Quicken Windows Subscription Member ✭✭
in Investing (Windows)

The company I work for is 30% owned by the employees. The founder passed away and the family owns 70% of the company. A trust was established and purchased 30% of the stock with a loan that has since been paid off. I've been with the company since before the plan was established. The employee shares are held in a retirement account at the principal.

My questions

How do I track the shares that have been granted to me? The employees do not pay for their shares. When an employee leaves the company their share are paid off and reshuffled to current employees.

This is the best description of what our plan looks like.

https://www.investopedia.com/terms/e/esop.asp

I would like to use the ESOP in my planning on Quicken but I'm stumped as to how to set up the account.

Any suggestions would be appropriated

.

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Answers

  • Tom Young
    Tom Young Quicken Windows Subscription SuperUser ✭✭✭✭✭

    Based on what you've said here, then one way of accounting for this would be along these lines:

    Create a new Account in Quicken, an Investment Account, most likely one I'd guess that would be an "offline" manual Account. As the company grants you stock, at no cost to you, you'd use an Add transaction as of the date they became yours and at a cost per share of $0. From time to time as the company discloses their estimate of the fair market value of the shares you could update the Quote/Price column in the Holdings window of the Account. This would give you an estimate of the value of all your shares as the Quote/Price changes.

    At retirement you'd "sell" all the shares back to the company, zeroing out the Account. The "gain" would be ordinary income to you.

    You probably should consult a CPA, or maybe the HR department of your company, to see if this suggested account comports correctly with your plan. The devil is always in the details.

  • munch008
    munch008 Quicken Windows Subscription Member ✭✭

    Tom,

    Thank you for your advice. I will give this a try soon.

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