Employee Stock Ownership Plans (ESOPs)
Some employers like the idea of giving employees an incentive to make the company grow in value. They do so by establishing retirement savings accounts (usually funded by the employer) that invest in the company’s own stock. Of course, you wouldn’t want this to be your only retirement nest egg, since you’re tied to the success (or failure) of one company. Recent corporate scandals have become cautionary tales about relying too heavily on the growth of an employer’s company to fund retirement. Still, in well-run companies with tangible promise, they can create incentives for good teamwork and allow employees, as part owners of a company, to share in the fruits of their own efforts.
Original text: Employee Stock Ownership Plans (ESOPs)
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