Employee Stock Ownership Plan – ESOP

A qualified, defined contribution, employee benefit (ERISA) plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are often used as a corporate finance strategy and are also used to align the interests of a company’s employees with those of the company’s shareholders. Since the employees own stock in the company, they have an interest in seeing the stock perform well as well, giving them incentive to do what’s best in the shareholder’s interest.

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