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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What is an ESOP trustee?

A trustee is the person or institution that normally has the formal responsibility to make sure the plan is operated for "the exclusive benefit of plan participants." Trustees can be "independent" or "directed." An independent trustee makes decisions for the plan based on the trustee's judgment, relying as needed on advice from qualified professionals; a directed trustee makes decisions based on the direction of another party, which could be the ESOP administrative committee, management, or employee participants (such as when employees direct the voting of their allocated shares).

For more details, see ESOPs and Corporate Governance.

Link to this FAQ Topic: Governance, Fiduciaries & Compliance