Employee stock ownership plan

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Related to Stock Purchase Plans: ESPP

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 ?
Savings from an employee stock purchase plan can be applied to a variety of financial needs, such as a down payment for a home, a home improvement project, tuition payments or other life expenses.
Under the Company's 2000 Employee Stock Purchase Plan, 160,000 shares were authorized to be sold.
Scalise noted that many SIA member companies have employee stock purchase plans (ESPP).
Schwab Corporate & Executive Services offers a wide range of specialized corporate services including comprehensive management and administration of employee stock option and stock purchase plans, restricted stock and other integrated employee benefit plans.
The program provides that repurchased shares may be reissued to employees under the company's stock option and stock purchase plans.
will be able to offer their clients automated enrollment capabilities that will empower employees to join corporate employee stock purchase plans via telephone, change contribution amounts and interrupt contributions, if necessary.
Franklin affirms, "The automated enrollment feature of OptionVoice for the Express Employee Stock Purchase Plan (ESPP) product is a very valuable tool for our clients.
The purpose of the repurchase program will be to acquire shares for issuance under the company's stock option and employee stock purchase plans.
The shares will be used for stock option or stock purchase plans, or for other general corporate purposes.
The accounts of participants in the dividend reinvestment and employee stock purchase plans will be credited with fractional shares.