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Getting Their Slice

Save money, and keep employees happy with stock ownership plans.

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This story appears in the September 2004 issue of Entrepreneur. Subscribe »

S corporations offer a plethora of tax benefits, but one you may not have considered involves Employee Stock Ownership Plans (ESOPs). Nova Engineering, a Cincinnati-based S corporation, has discovered the tax benefits of ESOPs. CFO Jeff Wyatt says the ESOP's tax-deferral benefits have been a boon to the company's cash flow.

Wyatt says Nova established an ESOP in 1998 because the company leaders strongly believed in employee ownership. Owning a piece of the pie has also made employees more committed and dedicated to the success of Nova, Wyatt believes. "The best thing about the ESOP is what it has done for the employees," he says. "As owners, they are motivated to do the best work for us."

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