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ESOP |
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ESOP
Employee stock ownership plan (ESOP). An ESOP is a trust to which a company contributes shares of newly issued stock, shares the company has held in reserve, or the cash to buy shares on the open market. The shares go into individual accounts set up for employees who meet the plan's eligibility requirements. An ESOP may be part of a 401(k) plan or separate from it. If it's linked, an employer's matching contribution may be shares added to the ESOP account rather than cash added to an investment account. If you're part of an ESOP and you leave your job, you have the right to sell your shares on the open market if your employer is a public company. If it's a privately held company, you have the right to sell them back at fair market value. The vast majority of ESOPs are offered by privately held companies. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| ESOP is part of my exit strategy," said Schaefer, who decided to pass the business along to his employees rather than sell it to a competitor. An ESOP is a form of employee benefit plan, like a 401k, which qualifies for generous tax benefits in addition to addressing often vexing and occasionally rancorous succession issues. Willamette Management Associates Guide to ESOP Valuation and Financial Advisory Services, edited by Robert E Reilly and Robert R Schweihs (Willamette Management Associates, 2005), describes the practical applications of employer stock option plan (ESOP) valuation, financing, taxation and transaction structuring. |
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