Employee Stock Ownership Plan (ESOP):

An employee-owner program that gives the workforce an ownership stake in the company. In this program an Employee Stock Ownership Plan (ESOP) refers to an employee benefit plan that gives the employees an ownership shares/rights in the company. The employer/company allocates a certain percentage (%) of the company’s stock shares to each eligible employee at no upfront cost (no cash/direct money). The distribution of shares may be based on the employee’s pay scale, terms of service, or some other basis of allocation as decided by the company.

Employee Stock Ownership Plan (ESOP) Benefits (ESOP):

1.  Tax benefits for employees

2. Higher employee engagement:  It improves awareness among employees since they are given the opportunity to influence decisions about products and services.

3.  Positive outcomes for the company

Read more: Drawback of ESOP