---
title: Employee Stock Ownership Plans
summary: ESOPs are the most common form of broad-based employee ownership in the United States — a retirement trust that holds company stock on employees' behalf, often used as a business-succession vehicle.
---

The **employee stock ownership plan (ESOP)** is the most common structure for broad-based employee ownership in the United States — a type of retirement trust that holds company stock (partly or wholly) on employees' behalf. Participants accumulate shares over time and are typically bought out when they leave. ESOPs are frequently used as a succession vehicle when a business owner sells, since US tax law gives the transaction favourable treatment.

It's a US-specific legal structure. The [Employee Ownership Trusts](employee-ownership-trusts.md) concept page covers the closest UK equivalent — the two aren't interchangeable, and the Australian co-ops cross-linked below use neither exact mechanism; they're related by spirit (broad-based employee/worker ownership), not by legal structure.

## Further reading

- Wikipedia: [Employee stock ownership plan](https://en.wikipedia.org/wiki/Employee_stock_ownership_plan)

## See also

- [Employee Ownership Trusts](employee-ownership-trusts.md)
- [Equity Compensation Plans](equity-compensation-plans.md)
- [Worker Cooperatives](worker-cooperatives.md)
- [Workplace Democracy](workplace-democracy.md)
- [Economic Democracy](economic-democracy.md)
- [888 Cooperative Causeway](../organisations/888-cooperative-causeway.md)
- [Co-operative Bonds](../organisations/cooperative-bonds.md)
