Employee Stock Ownership Plan (ESOP)

What is an S Corporation ESOP?

A Subchapter S corporation is a business entity that provides flow-through tax treatment to its shareholders. An employee stock ownership plan (ESOP) is a qualified defined contribution plan that provides a company's workers with retirement savings through their investments in their employer's stock, at no cost to the worker. ESOPs are regulated by the Employee Retirement Income Security Act (ERISA) just like pension funds, 401(k) plans, and other qualified retirement plans. Congress authorized the S corporation ESOP structure to encourage and expand retirement savings by giving hundreds of thousands of American workers in all 50 states the opportunity to have equity in the companies where they work. Today S ESOPs accomplish exactly what Congress intended them to do: create jobs, generate economic activity and promote retirement savings.

ESOP stats There are approximately 10,000 ESOPs in place in the U.S. covering 10.3 million employees. Approximately 4,000 companies are 100% owned by the ESOP. On average, companies contributed 11.8% annually to the ESOP. 22% of ESOPs are in the manufacturing sector. On avergae, ESOP companies contributed over 75% more to their ESOPs than other companies contributed to their primary retirement plan.

The ESOP Association
If you would like more information about ESOPs, visit The ESOP Association at www.esopassociation.org

The ESOP Association (TEA), is a national non-profit membership organization, with 18 local Chapters, serving approximately 2,500 employee stock ownership plan (ESOP) companies, professionals with a commitment to ESOPs, and companies considering the implementation of an ESOP.


Learn more about the American Dream at Work at www.esca.us

ESCA is the voice in Washington, DC that speaks exclusively for employee-owned S corporations ("S ESOPs"). As an organization that is both company-sponsored and company-directed, ESCA is a reflection of the members it represents. ESCA's government affairs efforts are led by a team of highly-regarded political and legal professionals who work at the direction of ESCA's leadership, which is comprised of member companies.

The National Center for Employee Ownership
Visit http://www.nceo.org/ to learn more about the NCEO

The National Center for Employee Ownership (NCEO) is a private, nonprofit membership and research organization that serves as the leading source of accurate, unbiased information on employee stock ownership plans (ESOPs), equity compensation plans, and ownership culture. They are the main publisher and research source in the field, hold dozens of Webinars and in-person meetings annually, and provide services to their thousands of members and others.

Employee Ownership Foundation
For more information about EOF visit http://www.employeeownershipfoundation.org/

The Employee Ownership Foundation's (EOF) primary purpose is to support programs that will increase the level of awareness and appreciation of the benefits of employee ownership and increase the number of employees who have access to this benefit. The Foundation is classified as an “affiliated” foundation of The ESOP Association and is classified as a public foundation under section 509 (a) 3 of the Internal Revenue Code.

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