Definition of employee stock option plan (ESOP)

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TeachMeFinance.com - explain employee stock option plan (ESOP)



employee stock option plan (ESOP) -- an employee benefit in which employees, as part of their compensation, are given equity shares (stock) in their company. The purchase of such stock is normally funded by a loan. The stock is transferred initially to a trust and the loan is paid off from dividends on the stock and contributions from the employing company.


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