Employee Share Option Plan (ESOP) / Employee Stock Ownership Trust (ESOT)
What is ESOP/ESOT
ESOP/ESOT is a program that facilitates the acquisition and distribution of a company's shares to its employees. Companies provide their employees with stock ownership, often at no up-front cost to the employees. Generally, an ESOP/ESOT should include all full-time employees.
However, these groups must be reviewed in companies where they could have a significant impact on the overall employee compensation structure of the ESOP/ESOT. The distinguishing feature of an ESOP/ESOT is that, unlike a Stock Bonus Plan, may engage in “leveraged” purchases of company stock. That is, an ESOP may acquire stock not only on a year-by-year basis, but also may borrow funds in order to purchase a block of stock.
Why ESOP/ESOT?
- Increase in employee loyalty and productivity
- Attract and retain talented key staff
- Improve employee incentives to work hard and make decision that are in the company’s best interests
- Align interest of employees and shareholders
- Possible tax saving for both employers and employees
- Asset diversification
Our services for ESOP/ESOT
We provide trustee, administration and management services. We offer tailor-made trust structures to suit employer’s need in providing a variety of benefits to its employees (share-based incentive arrangements).
- ESOP/ESOT formation
- Provision of corporate trustee services
- Provision of full administration services
- Provision of nominee services
- Ongoing monitoring of share and option entitlements
- Facilitate the purchase and disposal of employee entitlements
- Custody for employee share entitlements
- Bookkeeping, financial accounting and reporting to employers and employees on entitlements
- Investment solutions for individual participants
