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What is an esop plan?
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23rd Nov 2009 by Daniel Cross, ChFC
An ESOP is an Employee Stock Options Plan. Employers use this type of benefit as a way of giving their employees ownership value in the company and serves as a way of motivation since their performance relates to the value of the stock. They come with a vesting schedule much like a pension or 401k, but lack the rigor required by law. This can be a disadvantage for unwary employees as they can find their accounts heavily weighted towards their companies stock which can have disasterous results as the collapse of Enron, Worldcom, and others have shown.
An ESOP is an Employee Stock Options Plan. Employers use this type of benefit as a way of giving their employees ownership value in the company and serves as a way of motivation since their performance relates to the value of the stock. They come with a vesting schedule much like a pension or 401k, but lack the rigor required by law. This can be a disadvantage for unwary employees as they can find their accounts heavily weighted towards their companies stock which can have disasterous results as the collapse of Enron, Worldcom, and others have shown.
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21st Nov 2009 In Business
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