For movie buffs and film fans everywhere, late October brought sad news: Sean Connery, the venerable Scottish actor who starred in dozens of films, died at age 90.
Connery, of course, was best known for his role as James Bond, the suave British secret agent who foiled evil masterminds and power-hungry fiends the world over. Polls have long chosen him as the public’s favorite of the half-dozen or so actors who portrayed “007,” the character’s alternative moniker.

Connery’s fifth Bond film was “ You Only Live Twice ,” which put him in Japan among a never-ending parade of beautiful women (as usual), in between escaping death at regular intervals (as usual). Teamed with a small army of ninjas, he invades an island controlled by the evil organization SPECTRE and undermines its dastardly plot to goad the world’s two superpowers into war.
Why the movie’s name? Bond fakes his own death early on, allowing him to “live again” and save the earth from certain destruction. Just another day’s work for 007.
Can business owners live twice?
Many business owners wonder how they can enter their “second life” of retirement (or other pursuits) by exiting their role gracefully. They want adequate reimbursement, while leaving something for the hard-working employees who helped build their success.
The solution, literally, is to sell their company twice … via an ESOP plan. Maybe not as flashy or adventurous as what James Bond might do, yet with a vaguely similar ending where everyone winds up safe and (hopefully) happy.
What does an ESOP stand for? Employee stock ownership plan, a retirement benefit plan for employees (like a 401(k)), but with important differences. As opposed to a 401(k), an ESOP does not accumulate shares of other companies in plan participants’ accounts – it invests primarily in stock of the employer company.
Instead of reducing their current salary to build their account value, employees do not use any of their money to fund ESOP accounts. Growth in ESOP employee account value comes from the employer’s financial performance – which, of course, aligns the interests of employee and employer.
Finally, an ESOP can borrow money to buy the sponsoring company’s shares directly from selling shareholders or from the company. This is how business owners can use the ESOP to create a liquidity event or an exit strategy.
ESOPs are gaining traction – approximately 6,500 have been formed in the U.S. The business structure offers many benefits. Owners can still retain control of the business, whether by personal interaction or a management team. Employees own shares of company stock, creating a (more than) vested interest in its long-term prosperity. It’s win-win all around.
Selling twice? It’s no roll of the dice.
An ESOP company really can be sold twice. The first sale occurs after the structure is implemented, as shares are being allocated to employees.
The second sale, better known as “second bite of the apple” for shareholders or for others the shareholders care about (often key employees or family members) typically equals 30 to 40 percent of the equity value of the business. This value consists of the seller financing warrants and non qualified management incentive plan.
ESOPs aren’t always readily understood. They are increasingly popular among business owners who want to leave a legacy, one where they’ll always be warmly welcomed back at the shop.
Intrigued? Ready to learn more? Contact Excel Legacy Group to start a conversation about whether an ESOP is right for your organization.
Saving the world? Not quite … although an ESOP could have a profound, positive effect on your world. We cannot all be James Bond, right?