Employee Stock Ownership Plan (ESOP)

General information: An Employee Stock Ownership Plan (ESOP) is a retirement plan where the ownership of the company is held in trust for the benefit of the employees of the company. The Trust buys the company on behalf of the employees and uses the profits of the company to pay off the loan used in the purchase. This means the employees don’t pay out of their wages or income but gain ownership as a result of their work.