ESOP (Employee Stock Option Plan)

An Employee Stock Ownership Plan (ESOP) is a retirement benefit that makes workers part owners of the company. ESOPs give employees a stake in their employer’s success through equity ownership. In an ESOP, employees become shareholders in the company through a trust that acquires stock and pays out dividends when employees retire or leave the company. It’s a lot like a 401 (K), though contributions are made entirely by the company through gifted shares. 

Employers decide the number of shares to be offered under ESOPs, their price, and the beneficiary employees. ESOPs are then granted to employees, and a grant date is provided. 

Once ESOPs are offered, they remain in a trust fund for a specific period, called the vesting period¹³.

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(1) How an Employee Stock Ownership Plan (ESOP) Works: Details ... - Insider. https://www.businessinsider.com/personal-finance/esop.

(2) What is Esop? - Definition, Benefits & How Do ESOPs Work? - Groww. https://groww.in/p/what-is-esop.

(3) What Is an ESOP and How Does It Work? – RMEOC. https://www.rmeoc.org/impact-stories/what-is-an-esop/.

(4) How an ESOP Works | A Visual Guide to Employee Ownership. https://www.esopinfo.org/how-esops-work/.