Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE (www.oxfordhandbooks.com). © Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 23 March 2019

Abstract and Keywords

An Employee Stock Ownership Plan (ESOP) is the most common vehicle for broad-based worker ownership in the United States. An ESOP is a legal trust that holds the shares of all the workers in a firm and thus makes it possible to have long-lasting worker ownership. Under US law existing companies can contribute stock or cash to this trust in order to buy shares of company stock to gradually establish worker ownership. Probably, unique to the United States, this workers’ trust can borrow funds to buy shares on behalf of workers in order to establish significant, majority, or even 100 per cent worker ownership in one single transaction. All company contributions to the worker trust, whether in cash or stock or to repay loans used to buy stock for workers, gives the company a tax deduction under US federal law. Also interest on the loan is deductible.

Keywords: employee stock ownership, ESOPs, US, employee stock plans, tax deduction, deductible loan

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.