Employee Stock Ownership Plan. A trust established by a corporate which acts as a tax-qualified, defined-contribution retirement plan by making the corporation's employees partial owners. contributions are made by the sponsoring employer, and can grow tax-deferred, just as with an IRA or 401(k). But unlike other retirement plans, the contributions must be invested in the company's stock. The benefits for the company include increased cash flow, tax savings, and increased productivity from highly motivated workers. The main benefit for the employees is the ability to share in the company's success.
Due to the tax benefits, the administration of ESOPs is regulated, and numerous restrictions apply. also called stock purchase plan.

Use ESOP in a sentence

We had an esop in place that would ensure some things went a certain way and worked out for everyone involved.

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You may want to try and offer extra perks to your workers like an ESOP that they can use as their personal investment.

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The ESOP was a key selling point for new candidates to apply to the progressive company, it was the main selling point for many.

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escrowed to maturity pension plan