Employee Share Ownership Plan (ESOP)

Employee Share Ownership Plans are benefit plans that confer shares on company employees or employees of a certain seniority via bonuses payable in shares; through stock option grants; or through profit-sharing schemes. Companies setting up ESOPs – which can be endowed by companies contributing shares or cash to buy shares – receive tax benefits, depending on the jurisdiction. ESOPs can in some cases lever up by borrowing to buy shares.