An employee stock ownership plan (ESOP) is a qualified retirement plan that is funded primarily with employer stock. Ideal for mid- to large-sized corporations with stock available for purchase.
ESOPs allow participants to become part owner of your company, serving as incentive to keep profits healthy. ESOPs also serve as a method of corporate finance, because the sponsor can borrow money to purchase stock. Plans are especially suited to finance acquisitions and capital projects and to make current debt service 100% tax-deductible.
ESOPs provide employees a sense of ownership and purpose. When used as executive compensation, ESOPs allow your high-value employees to maximize their earnings by deferring their compensation until they retire or leave your organization.