ESOP plans are designed to facilitate direct investment by employees in their employer’s company.
The Standard ESOP plan encourages the employee and the employer to work together to achieve the long-term success of the business. It provides employees with an opportunity to receive dividend income and benefit from capital appreciation and it provides the employer with a new source of equity capital for business uses.
The Succession ESOP is a special application of the Standard ESOP which facilitates a transfer of control of the business from the current and retiring or departing owner(s) by involving the employees over time.