Employee Stock Ownership Plan

Business, Legal & Accounting Glossary

Definition: Employee Stock Ownership Plan



Full Definition of Employee Stock Ownership Plan


Employee stock ownership plan (ESOP), also known as a stock purchase plan, is a program designed to promote purchasing of company stock by the employees. The distribution of stock through an employee stock ownership plan is facilitated by the employee stock ownership trust, which represents actual accounts through which stock is bought and sold. An employee stock ownership plan is a powerful promotional tool. By making an employee stock ownership plan available, companies enable employees to participate in the management of the company. Furthermore, financial incentives and rewards associated with an employee stock ownership plan forge a synergy of interests between employees and shareholders. Corporations that set up an employee stock ownership plan are eligible for tax deductions for employee stock ownership plan dividends for participating employees. An employee stock ownership plan also grants deductions for dividends intended to repay stock acquisition loans.


Synonyms For Employee Stock Ownership Plan


ESOP, stock purchase plan

Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/employee-stock-ownership-plan/
Modern Language Association (MLA):
Employee Stock Ownership Plan. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. July 16, 2020 https://payrollheaven.com/define/employee-stock-ownership-plan/.
Chicago Manual of Style (CMS):
Employee Stock Ownership Plan. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/employee-stock-ownership-plan/ (accessed: July 16, 2020).
American Psychological Association (APA):
Employee Stock Ownership Plan. PayrollHeaven.com. Retrieved July 16, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/employee-stock-ownership-plan/

Definition Sources


Definitions for Employee Stock Ownership Plan are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February, 2020 | 2 Views.