Employee stock ownership plan (ESOP) An employee stock ownership plan, often simply called ESOP, refers to a form of retirement plan some companies offer employees wherein compensation is provided in the form of stocks. It may also be granted as money earmarked for purchasing stocks. It may be a component of an employee’s retirement plan, or it may be all of it. This essentially creates a trust fund, and employees may access their shares upon leaving the company. At this point, the employer purchases the accumulated shares of stock from the employee at their current market value. This system has many benefits, including potential tax deductions and the creation of employee ownership.
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