Employee stock ownership plan

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Employee stock ownership plan (ESOP)

A company contributes to a trust fund that buys stock on behalf of employees.

Employee Stock Ownership Plan

An employee benefit in which employees are issued or sold shares in the publicly-traded company for which they work after a certain number of days of employment. ESOPs are designed to give employees equity in the company to boost morale and thereby improve productivity. ESOPs receive various tax benefits, and may give employees a greater say in the election of the board of directors.

Employee Stock Ownership Plan (ESOP)

A qualified retirement plan in which employees receive shares of the common stock of the company for which they work and the company receives an investment tax credit. The purpose of this type of plan is to give employees a vested interest in the company, thereby providing them with an additional incentive toward greater productivity. See also leveraged 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.

References in periodicals archive ?
Employee Stock Ownership plans give employees the opportunity to take advantage of a business profits by offering individual shares in the company.
The AICPA changed the accounting for ESOPs by issuing Statement of Position 93-6, Employers' Accounting for Employee Stock Ownership Plans, in 1993.
Employee stock ownership plans (ESOPs) are an often overlooked way of transferring closely held businesses.
In December 1992, AcSEC issued an exposure draft of an SOP, Employers' Accountering for Employee Stock Ownership Plans, which it believes accomplishes these objectives.
Social Security alone won't provide a comfortable retirement, and there's an ever-growing array of additional savings programs available-401(k)s, IRA, Employee Stock Ownership Plans (ESOPs), annuities, and 403(b)s, to name a few.
76-3, Accounting Practices for Certain Employee Stock Ownership Plans, requires that such dividends be charged to retained earnings for financial reporting purposes.
Smiley states, "We probably know more about employee stock ownership plans and ESOP-assisted buyouts and have more experience with real companies in real situations over many, many years than anyone.
76-3, Accounting Practices for Certain Employee Stock Ownership Plans, is the only existing authoritative literature on the accounting for ESOPs.
Scott + Scott, LLC is a firm that devotes a good part of its practice to representing current and former employees who have lost a significant portion of their retirement savings in their companies' 401(k) and/or employee stock ownership plans.
This month's column discusses a new method developed by the Financial Accounting Standards Board emerging issues task force (EITF) to calculate the employer's expense for certain employee stock ownership plans (ESOPs).
ESOPs: The Handbook of Employee Stock Ownership Plans, edited by Gerald Kalish, Probus Publishing Company, 118 North Clinton Street, Chicago, Illinois 60606, 1989, 332 pp.
The group is asking lawmakers to defeat an Administration proposal that would all but destroy S corporation Employee Stock Ownership Plans (ESOPs).

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