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)

When do ESOP companies typically distribute account balances to employees?

Other than distributions due to diversification, death, disability, or retirement, about one-third of ESOP companies delay distributions until five years after departure, while another half pay out within one year, and the remaining sixth off in between one and five years. These payouts can be delayed further, however, if an ESOP loan has not yet been repaid.

Link to this FAQ Topic: Distributions & Repurchase