--- title: The ESOP Edge Newsletter - October 2026 --- [Skip to content](https://landing.fmicorp.com/the-esop-edge-newsletter-october-2026#main-content) ![ESOP-Edge-Text-Block-3](https://landing.fmicorp.com/hs-fs/hubfs/ESOP-Edge-Text-Block-3.png?width=500&height=403&name=ESOP-Edge-Text-Block-3.png "ESOP-Edge-Text-Block-3") ## Employee Ownership Is Having a Moment. How Should Business Owners React? ##### *Employee Ownership Month, new legislation in Washington, and a simple principle I believe leads to better ownership-transition decisions.* October is Employee Ownership Month—in case your calendar somehow failed to remind you—which makes it a natural time to talk about ESOPs. Rather than simply celebrating employee ownership, it’s important to step back and look at what is happening in the market and consider what it means for privately held business owners thinking about an eventual transition. Interest in employee ownership continues to grow as ESOPs receive increased attention in Washington. More capital providers are interested in financing ESOP transactions, and ESOPs are increasingly being evaluated alongside private equity, strategic M&A, family succession and simply continuing to own the business. This is a positive development. But increased interest in ESOPs shouldn’t lead every owner to the same conclusion. The best ownership-transition process starts with informed stakeholders who understand all of the available alternatives based on that company’s specifics. ### Washington is paying attention The Retire Through Ownership Act passed Congress with overwhelming support, including a 401–14 House vote in September. This legislation is intended to provide greater clarity around how fair market value is determined when an ESOP purchases privately held company stock, addressing a longstanding source of uncertainty for trustees, companies and advisors. For business owners, the broader message is straightforward: employee ownership continues to attract serious attention in Washington. But the merits of a particular ESOP transaction still depend on the company and its stakeholders’ objectives. In my conversations with business owners, the practical questions remain the same: How much liquidity can I receive? What control would I retain? What are the after-tax economics, and how does an ESOP compare with the alternatives? Those answers—not momentum in Washington—should drive the decision. ### A recent example of a partial ESOP I recently had the opportunity to advise Ritenour Group, a union trade contractor based in Twinsburg, Ohio, on its transition to partial employee ownership through a minority ESOP transaction. [![TOMB\_RitenourGroup\_ESOP](https://landing.fmicorp.com/hs-fs/hubfs/TOMB_RitenourGroup_ESOP.jpg?width=150&height=241&name=TOMB_RitenourGroup_ESOP.jpg)](https://fmicorp.com/about/news/fmi-advises-ritenour-group-on-transition-to-employee-ownership) [Read FMI's announcement of the Ritenour Group transaction](https://fmicorp.com/about/news/fmi-advises-ritenour-group-on-transition-to-employee-ownership). For those interested in the details, the transaction announcement linked above provides additional background. What I find particularly interesting about this transaction is how the structure illustrates an important point about the flexibility of employee ownership. An ESOP does not have to mean selling 100% of a company or walking away from the business. A minority ESOP can be one step in a longer-term ownership strategy—providing liquidity for existing stakeholders today while preserving flexibility around the company’s future ownership and capital structure. The important part is understanding the trade-offs before choosing the path for your business. Understand your company's options If I could encourage anyone involved in an ownership transition to do one thing, it would be this: ###### Become an informed seller before becoming a committed seller. Understand what your company may be worth to different buyers. Understand what an ESOP could realistically pay. Understand the financing and leverage required. Understand the tax consequences. Understand what you would own—or no longer own—after the transaction. And understand what each alternative means for your employees, management team, and family. Sometimes that analysis leads to an ESOP. Sometimes it leads to private equity or a strategic sale. Sometimes it leads to the conclusion that now isn’t the right time to transact at all. Any of those can be the right outcome if the decision reflects a clear understanding of the alternatives. This idea is also at the heart of The ESOP Edge. Each month, I’ll share observations from the transactions we’re working on, conversations I’m having with business owners, and developments across valuation, financing, tax policy, regulation, and the broader ownership-transition market. My goal is to help owners understand the ESOP option, understand how it compares with the alternatives, and make better decisions about one of the most consequential transactions of their lives. ### Coming next month In November, I’ll be at The ESOP Association’s Employee-Owned Conference in Las Vegas. In next month’s issue, I’ll share observations from the conference and what they could mean for business owners evaluating employee ownership. If you’ll be there, I would welcome the chance to connect. #### Meet Our ESOP Team: ![Nathan Perkins\_ESOP Edge Headshot-Max-Quality](https://landing.fmicorp.com/hs-fs/hubfs/Nathan%20Perkins_ESOP%20Edge%20Headshot-Max-Quality.jpg?width=600&height=340&name=Nathan%20Perkins_ESOP%20Edge%20Headshot-Max-Quality.jpg) ### **Nathan Perkins** ## Managing Director, ESOPs FMI Capital Advisors [mailto:Nathan.Perkins@fmicorp.com](mailto:Nathan.Perkins@fmicorp.com) [Email me](mailto:Nathan.Perkins@fmicorp.com) ![David Jenkins\_ESOP Edge Headshot-Max-Quality](https://landing.fmicorp.com/hs-fs/hubfs/David%20Jenkins_ESOP%20Edge%20Headshot-Max-Quality.jpg?width=600&height=340&name=David%20Jenkins_ESOP%20Edge%20Headshot-Max-Quality.jpg) ### **David Jenkins** ## Vice President, ESOPs FMI Capital Advisors [Email Me](mailto:David.Jenkins@fmicorp.com) ### Subscribe to The ESOP Edge Newsletter ##### Disclaimer: FMI Capital Advisors, Inc. (“FMI”) is a broker-dealer registered with the Securities and Exchange Commission and a member of FINRA and SIPC. FMI is an affiliate of FMI Corporation. This publication is intended solely for institutional investors as defined in FINRA Rule 2210(a)(4) and is not intended for distribution to retail investors. This publication is provided for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security, transaction, or investment strategy. This publication is not a research report as defined under FINRA Rule 2241 and was not prepared by a research analyst. It does not contain ratings, price targets, or recommendations, and it does not contain sufficient information upon which to base an investment decision. ##### Readers should consult their own financial, legal, and tax advisors before making any investment decision. FMI provides investment banking and advisory services and may seek to provide such services to companies discussed or referenced in this publication. ##### Information contained herein has been obtained from sources FMI believes to be reliable, but FMI makes no representation or warranty as to its accuracy or completeness. Forward-looking statements reflect current market conditions and expectations and are subject to change without notice. Past performance is not indicative of future results. Copyright © 2026 FMI Corporation