What is an Employee Stock Ownership Plan (ESOP)?

This is the plan where employees own a substantial part or the entire company.

What does it mean to be employee owned?

Being employee owned means that the employees have a stake in the company. The success of the company is tied directly to employee goals and accountabilities.

What are the objectives of an ESOP?

Most stock plans have one or a combination of the following as objectives:

  • Employee commitment and a feeling of ownership
  • Creating additional wealth for employees
  • To supplement retirement / social security benefits
  • To attract talented / highly valued professionals
  • To retain employees or specific skill groups