| An Employee Stock Ownership Plan, or ESOP, is a | | | | fine incentive to recruit employees. |
| financial structuring of a corporation to allow | | | | To establish an employee stock ownership plan |
| employees to own a part of the company by | | | | the firm must contact a financial advisor that is |
| creating a stock option program. Employees, | | | | well trained in this area of business planning. There |
| generally after a certain length of employment, | | | | are many contingencies that must be met to |
| are allowed to begin purchasing stock option in the | | | | establish this type of investment plan. A trust |
| company. Employee ownership programs can be | | | | must be established, stock prices set and rules |
| for a partial or full ownership of the company. | | | | created for the purchasing and selling of this |
| There have been many advantages shown in | | | | stock. Experienced advisors at is a good place to |
| creating an ESOP for a corporation. Employees | | | | start for this help. |
| who feel they have a crucial part in the | | | | Once a plan has been created the company can |
| company's future will work harder to ensure the | | | | experience the growth and commitment from its |
| company's success. Corporations that set up an | | | | employees that it desires. As employees begin o |
| employee stock ownership plan will also create a | | | | take an active part in the future of the company, |
| board of directors and allow employees to have a | | | | the company will grow. The additional capital now |
| vote on many important issues. | | | | available to the company through the sale of its |
| This type of plan also keeps ownership of the | | | | stocks will ensure the growth will happen. |
| company within a confined number of people. | | | | Creating this type of plan will also allow owners of |
| Stocks will not be sold openly on the stock | | | | the company to eventually retire without a large |
| market and persons outside of the company | | | | hassle. Owners, now major stock holders, will be |
| cannot partake in stock options. Employees may | | | | able to sell off their stock and walk away from |
| be limited to the amount of stock they can | | | | the company when they are ready to retire. |
| purchase; this will be determined by each individual | | | | There will not be a need for selling the company |
| plan. | | | | or even possibly shutting it down when the owner |
| Most companies that establish an employee stock | | | | wishes to retire. |
| option plan also offer dividends to its shareholders. | | | | The process of creating an employee owned |
| This extra incentive makes investing in the | | | | stock ownership program is not new. Companies, |
| company even more desirable. Many corporations | | | | such as Sears and Roebuck, in the late 1800's |
| establish 401k options for these stocks and for | | | | began establishing plans to give their retiring |
| dividend deposits, creating a generous retirement | | | | employee's a stock option so that they could |
| savings option for the employee. | | | | retire in comfort. It is also not as rare as you |
| Establishing this type of plan offers the | | | | may think. Statistics show that as many as 20 |
| corporation owner many benefits they would not | | | | percent of large corporations in the United States |
| have had under different circumstances. Creating | | | | are now owned this way. Southwest Airlines runs |
| an employee stock ownership plan is a fabulous | | | | a very successful employee stock option |
| way for the company to raise capital. It is also a | | | | program. |