Employee stock ownership plan

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Related to Employee stock ownership plan: Employee Stock Option Plan

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 ?
76-3, Accounting Practices for Certain Employee Stock Ownership Plans, requires that such dividends be charged to retained earnings for financial reporting purposes.
In December 1992, AcSEC issued an exposure draft of an SOP, Employers' Accountering for Employee Stock Ownership Plans, which it believes accomplishes these objectives.
The suit alleges that the employee stock ownership plan committee for UAL Corp and the plan trustee, State Street Bank, were aware that UAL's stock was unstable but held the stock as its value fell even before the 11 September 2001 terrorist attacks, which further weakened the stock price.
To qualify for nonrecognition treatment, transfers must meet the requirements of IRC section 1042, Sales of Stock to Employee Stock Ownership Plans or Certain Corporations.
Our new Nicholson Kovac brand reflects who we are today as our employees become owners of the company through a seller-funded Employee Stock Ownership Plan (ESOP)," said President and CEO Pete Kovac.
A combination 401(k) plan and employee stock ownership plan, commonly called a KSOP, can be used to decrease the administrative and legal expenses for employers who maintain both a 401(k) plan and an employee stock ownership plan.
Krause president Chet Krause, who set up an employee stock ownership plan 14 years ago in an attempt to keep ownership local, said the ultimate per-share price would be significantly higher, although it was not clear if a higher per-share price would increase the purchase price.
Also a sore spot for some shareholders is the lack of a universal employee stock ownership plan, while Eisner and other top executives rake in what critics call a bloated portion of the pay and perks.
Last year he established an Employee Stock Ownership Plan at the company, giving approved workers a part ownership in the company.
This is a great moment for us and reflects our commitment to the ideals of the Employee Stock Ownership Plan Association," states Kenneth Sekley, President and CEO of Patio Enclosures, Inc.
2003-23, by permitting an S corporation employee stock ownership plan (SESOP) to assume the corporation's rights and obligations to repurchase the corporation's stock that the SESOP distributes to a participant's IRA.
The company has an employee stock ownership plan, the specifics of which are not being made public while the merger is pending.

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