Employee Stock Ownership Plan (ESOP)
An employee stock ownership plan (ESOP) is a type of profit-sharing benefit plan that may be offered to employees by companies. Basically, the company gives the employee shares of the company’s stock.
This is supposed to align the employee’s motivation and incentives with the goals and objectives of the company. When the company does well and the stock price goes up, the company is worth more and the employee shares in the profits. Therefore, this type of incentive plans ideally makes employees behave in a manner that benefits the company or organization as a whole.
Considering ESOP and Business Valuation
If your company is considering an Employee Stock Ownership Plan (ESOP), then a critical consideration is a business valuation. When you need a business valuation due to ESOP, it is standard practice to consult with a valuation firm. Need help finding one? If you fill out the form below, then we will get you connected with one of our strategic partners for your valuation needs.
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