Final answer:
An ESOP (Employee Stock Ownership Plan) is a benefit plan that allows employees to become owners of the company they work for by purchasing shares of the company's stock. It provides employees with a financial stake in the company's success.
Step-by-step explanation:
An ESOP (Employee Stock Ownership Plan) is a type of benefit plan that allows employees to become owners of the company they work for by purchasing shares of the company's stock. It is a form of employee ownership in which the company contributes shares of its own stock to a trust, and the trust then allocates those shares to individual employee accounts based on a predetermined formula.
One key feature of an ESOP is that it provides employees with a financial stake in the company's success. As employee-owners, they have a vested interest in the performance and profitability of the company, which can lead to increased productivity and loyalty.