Employee Stock Ownership Plan (ESOP)
An Employee Stock Ownership Plan (ESOP) is a qualified, defined contribution, employee benefit plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are "qualified" in the sense that the ESOP's sponsoring company, the selling shareholder and participants receive various tax benefits.
ESOPs are often used as a corporate finance strategy and are used to align the interests of a company's employees with those of the company's shareholders.
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