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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Does every ESOP company have to have an ESOP administrative committee?

An administrative committee, also called an ESOP committee, is the committee charged with making decisions about the plan, such as changing plan rules. Some of these committees also direct trustees on voting shares and other trustees issues. Some companies have a formal ESOP administrative committee, but most often, the board fulfills this function. The administrative committee is not the plan administrator–the firm that does the recordkeeping and other administrative work.

Link to this FAQ Topic: Governance, Fiduciaries & Compliance