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 employees have an equity interest in an Employee Ownership Trust?

Employees do not have any claim on equity value held in the trust, but they can be given stock options, stock appreciation rights, phantom stock, or restricted stock. They can also purchase shares. Stock appreciation rights and phantom stock do not count as actual ownership but are rather the right to the value of ownership. These plans would allow a company to continue to be 100% owned by the employee ownership trust. The company could also create rules that distribute the value to current and/or former employees.

For more details, see Using an Employee Ownership Trust for Business Transition.

Link to this FAQ Topic: Employee Ownership Trusts (EOTs)