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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How do employees benefit from an Employee Ownership Trust?

Companies with employee ownership trusts can decide how employees share in the profits of the company. That could be through conventional profit sharing, bonuses, share dividends, or some combination. Companies can decide how much to share with which employees with which rules. Generally, EOTs use profit sharing or dividends and make all employees eligible based on relative pay, tenure, or a combination after meeting an eligibility requirement.

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

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