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.

NCEO employee ownership FAQ hero (keyboard)

How much is enough to contribute to an ESOP? What is the typical amount contributed to an ESOP?

Employers often ask how much they should contribute to make the plan meaningful to employees. The average corporate contribution to all retirement-oriented plans combined is only about 4% of pay (this does not count employee contributions). The average ESOP contribution, according to various surveys, is about 6%-8% of pay. How much is enough to make employees feel like owners, unfortunately, cannot be answered, but research does show the higher the contribution, the more employees feel like owners.

Link to this FAQ Topic: ESOP Plan Design & Participation