An employee stock ownership plan or ESOP is a way to give employees full or partial ownership of a company. It is more common among private than public companies.

The company sets up a trust fund and contributes new shares of stock or cash to buy existing shares. In some cases, the trust can borrow money to buy new or existing shares and the company contributes cash to repay the loan.

Employees receive shares in the trust, based on their pay or other criteria. Their right to the shares vests over time. When they leave, the company must buy their shares at market value, which is determined through an annual appraisal if the company is private.

For more information, go to http://nceo.org/esops/index.html