Employee Stock Ownership Plans
Many employers opt for a plan design that will let their employees share in ownership of the company through an Employee Stock Ownership Plan (ESOP). There are a variety of unique ESOP structures including the ability for the ESOP to borrow money to finance the purchase of shares; or a leveraged ESOP. Only an ESOP is required by law to invest primarily in employer stock and may be used in conjunction with other retirement plans such as a 401(k) plan. Setting up an ESOP requires specific expertise and understanding of complex regulations and corporate finance strategies. The benefits of sponsoring an ESOP include increased employee morale and a sense of true ownership by the employees.