December 6, 2023


Future Depends on What You Do

How Does an Employee Stock Ownership Plan, or ESOP, Work?

Editor’s note: This is part two of a six-part series in which Peter Newman, CFA, of Peak Wealth Planning, explains the benefits of employee ownership for the U.S. workforce. There are more than 6,500 Employee Stock Ownership Plans, or ESOPs, in the U.S. covering almost 14 million employees. Part one is Five Key Advantages to Working at an Employee-Owned Company. Part three, Five Things Employee-Owners Need to Know About Their ESOP, will arrive in November.

Employee Stock Ownership Plans (ESOPs) offer a unique opportunity for employees to participate in the growth and success of the companies they work for. These plans provide employees with a means of accumulating wealth and building a retirement nest egg.

What is an ESOP?