Employee Stock Ownership Plan (ESOP)
In general, a qualified, defined contribution, employee benefit plan designed to invest primarily in the stock of the sponsoring employer. To clarify, ESOPs are “qualified” in the sense that the ESOP’s sponsoring company, the selling shareholder, and participants receive various tax benefits. ESOPs are often used as a corporate finance strategy or as a business succession strategy and are also used to align the interests of a company’s employees with those of the company’s shareholders.
In short, employee stock ownership plans can keep plan participants focused on company performance and share price appreciation. By giving plan participants an interest in seeing that the company’s stock performs well, these plans are believed to encourage participants to do what’s best for shareholders, since the participants themselves are shareholders.
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Take the next step. Call our retirement specialists today at (214) 891-8131 to discuss the workplace savings plan that may be right for you and your business. You can also contact us via the form below and one of our retirement plan specialists will respond ASAP.