What is an ESOP?

Like a publicly traded company, an Employee Stock Ownership Plan (ESOP) is a legal business structure that utilizes shares held in Trust to represent ownership in, as well as the overall value of, the organization. However, whereas shares in a public company are available to the general public with share value being determined by supply and demand in the open market, ESOP shares are only available to employees of the company and the share value is determined annually by an independent valuation firm selected by the ESOP trustee.

There are approximately 6,500 ESOPs in the U.S. today. Like Windings,

  • ESOPs cover over 14 million participants, of whom 10.3 million are active participants
  • The number of unique companies with an ESOP is approximately 6,272 (a company may sponsor multiple plans)