Problems with ESOPs
An employee stock ownership plan (ESOP) is a retirement plan in which investments are made primarily in the employer’s stock. The value of an ESOP account can grow in two ways – if the value of the stock increases or if additional shares are allocated to the participant’s account. Conversely, an ESOP account’s value will shrink […]
Employee Stock Ownership Plans: Are They Worth the Risks?
In good financial times, Employee Stock Ownership Plans (ESOPs) have the appearance of being an excellent deal for employees, because ESOPs offer partial ownership over the company that employs them. However, ESOPs pose serious risks that employees may not recognize until it’s too late. This paper describes how ESOP participants do not face just a single risk, […]