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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. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.