Frequently Asked Questions

Employee Ownership FAQs

Common questions about employee stock ownership plans (ESOPs), employee ownership trusts (EOTs), and other forms of employee ownership, from the basics to technical topics.

This FAQ is written primarily for business owners, managers, and advisors involved in setting up or running an employee ownership plan. If you're an employee at an ESOP company looking to understand your own benefits and rights, see our articles on Working at an ESOP Company and The Rights of ESOP Participants.

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Can an independent ESOP trustee be designated for a particular issue?

Yes, companies can designate an independent trustee for any particular issue. A reasonable compromise for many companies is to have an inside trustee or trust committee for normal operations, but appoint an outside trustee for special circumstances that present strong conflicts of interest, such as an acquisition proposal from another buyer or buying additional shares from a non-ESOP owner.

For more details, see ESOPs and Corporate Governance.

Link to this FAQ Topic: Governance, Fiduciaries & Compliance