An ESOP is an incentive ownership arrangement funded by an employer. In general, employer stock is contributed instead of cash. ESOPs provide capital, liquidity and certain tax advantages for private companies whose owners do not want to go public. An independent valuation analyst must value the employer’s securities before the plan is put into effect, and at least annually determine the price per share that supports all transactions associated with the plan. The IRS and Department of Labor have various requirements relating to these transactions and scrutinize them carefully. Trugman Valuation has performed valuations for ESOPs.