Matthew Ryan, a finance executive based in Cary, NC, brings more than 30 years of leadership experience across engineering, infrastructure, and government sectors. A BS and MBA graduate of George Mason University, he has held senior executive roles in Florida, Virginia, Maryland, and Washington, DC. Matthew Ryan currently serves as CEO and board member of Traffic & Mobility Consultants LLC in Orlando, where he oversees strategy, operations, financial reporting, and corporate development. Previously, he led S&ME Inc. as president and CEO and held executive leadership positions at HDR, managing profit and loss responsibilities across multiple divisions. He also has experience in public service, including work with the U.S. House of Representatives and the Government Accountability Office. His background in governance, finance, and employee ownership organizations informs his perspective on ESOP-owned S corporations and their role in succession and retirement planning.
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What It Means to Be Part of an ESOP-Owned S Corporation
For business owners planning succession or employees evaluating retirement options, an ESOP-owned S corporation can share company value while leaders run day-to-day operations. Employees gain a stake through an employee stock ownership plan (ESOP), a qualified retirement plan that holds company shares in trust. Paired with an S corporation structure, this plan provides tax advantages that support investment and planning.
An ESOP-owned S corporation operates when an ESOP trust owns some or all of the company’s stock and the company elects S corporation status. Employees join the ESOP and receive shares based on compensation and years of service, typically through employer contributions rather than buying stock themselves. As the company’s value grows, those shares can provide retirement benefits under rules that treat the ESOP as a retirement plan, not a management tool.
The tax structure of S corporations contributes to the appeal of this ownership model. Unlike C corporations, S corporations pass income through to shareholders rather than paying corporate income tax. When an ESOP trust owns shares and qualifies as tax-exempt, income attributable to those shares is not taxed at the federal level, allowing companies to retain more cash that may be used for reinvestment or ownership transition planning.
ESOP-owned S corporations deliberately separate ownership from control. Employees receive the financial benefits of ownership, while company leadership and the board continue to oversee key decisions and operations. The ESOP changes who holds shares for retirement, but it does not automatically change who manages the business, so employees can build value tied to company results without altering leadership.
Many ESOP companies provide information to help employees understand how their accounts function and how company performance affects value. Educational efforts may include updates on account balances and general explanations of how ESOP valuation works. These practices, commonly encouraged in ESOP guidance, help improve transparency and connect employee understanding to overall company performance.
This ownership model also supports business continuity when leaders step down. Companies that convert to ESOP ownership often want to remain independent after a founder’s departure, so they transfer ownership gradually to employees through the ESOP trust instead of selling to outside buyers. A staged schedule can increase employee ownership over time and give owners a transition path.
To preserve this model’s viability, organizations such as the Employee-Owned S Corporations of America (ESCA) engage lawmakers, defend tax rules, and publish resources for ESOP companies. ESCA focuses on protecting the legal and tax framework that allows S corporation ESOPs to operate as intended. For companies and employees, this advocacy helps protect the rules that make the structure possible and keep the retirement-plan framework intact.
Many people assume that ESOP participants help govern the company. In reality, the ESOP serves as a retirement plan, not a governance mechanism. Employees participate through their ESOP accounts, while company leaders and governance bodies remain responsible for running the business, so employees benefit from financial participation rather than operational authority.
Before choosing this structure, decide what outcomes matter most, like preserving leadership, reducing outside funding, or improving retention. ESOP-owned S corporations have tools to support these goals, but success depends on company stability, cash flow, and succession timing. By working with ESOP advisors on plan design, financing, and valuation, leaders can see if this model fits their transition plans without sacrificing control.
About Matthew Ryan
Matthew Ryan is the CEO and a board member of Traffic & Mobility Consultants LLC in Orlando, Florida. A resident of Cary, NC, he holds a BS and MBA in finance from George Mason University and has more than three decades of executive experience. His career includes leadership roles at S&ME Inc., HDR, Industrial Piping Inc., and Infrastructure Management Group, along with service in the U.S. House of Representatives and the Government Accountability Office. He is active in professional organizations, including ESCA and the Design Professional Coalition.
