Common
Employee stock ownership plan
Type of retirement plan in the United States
Employee stock ownership plan
An employee stock ownership plan (ESOP) in the United States is a defined contribution plan, a form of retirement plan as defined by 4975(e)(7) of Internal Revenue Service (IRS) codes, which became a qualified retirement plan in 1974. It is one of the methods of employee participation in corporate ownership. According to an analysis of data provided by the United States Department of Labor, there are approximately 6,237 companies in America with an ESOP. Notable U.S. employee-owned corporations include the 250,000 employee supermarket chain Publix Supermarkets, Hy-Vee, McCarthy Building Company, WinCo Foods, environmental consulting firm Citadel Environmental Services, Inc., and Harpoon Brewery. Today, most private U.S. companies that are operating as ESOPs are structured as S corporations ESOPs (S ESOPs). According to The ESOP Association, a national trade association based in Washington, DC, the most common reason for establishing an ESOP is to buy stock from the owners of a closely held...
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