Privately held ESOPs and public-company PE ratios discusses the impact that the price-earnings (PE) ratios of comparable public companies has on the valuation of a privately held ESOP company. It notes that PE ratios likely have further to fall and discusses what this means for ESOP companies:

Talk to your valuation firm about two things: First, ask how many years worth of earnings they use to calculate PE ratios. That applies to both your own company's earning and to earnings of the public comparison companies. Leonhardt notes that by using the trailing ten years of earnings, the S&P currently has a slightly below average PE of 14.5.

Second, pay special attention to the set of public comparison companies the valuation firm is using. It likely matters more than ever this year.