- An Employee Share Ownership Plan (ESOP) is an employee compensation plan that gives employees ownership of the company in the form of shares.
- ESOP encourages employees to give their best as the success of the company leads to financial rewards.
- They also help staff feel more valued and better paid for their work.
- Companies typically tie payments from the plan to vesting rights, which over time entitle employees to employer-provided assets.
- It is important to read the terms and conditions of your ESOP as each may be different and have different rules.
- Other employee ownership options include direct purchase programs, share options, restricted shares, phantom shares, and share appreciation rights.