Employee Stock Option Plan

Employee Stock Option Plan

by Richard C. Wilson & Family Offices Group Association Team

Family Office Definition: Employee Stock Option Plan

Employee Stock Option Plan definition:  ESOP is a type of retirement plan that allows employees (could be family members) to participate in business profits through the purchase of company stock.  The retirement plan (a trust) holds company stock, and the eligible employees are beneficiaries of the plan. ESOPs are only permissible for C- or S-corporations (not partnerships). Plan purchases of company stock must be no higher than fair market value (as determined by an independent appraiser for non-publicly held companies). The proceeds from selling company stock must be reinvested in the U.S. securities market (government securities and mutual funds not permitted). ESOP’s qualify for federal income tax deductions for the company, as well as growing tax-free for employees until they elect to take a distribution. If 30% or more of company stock is sold for a C-corporation, capital gains tax may be avoided. ESOPs are appropriate for transitioning business ownership and not selling the business.

Download our free Family Office Report to learn more about the family office industry.

Read more Family Office Definitions

Tags: What is Employee Stock Option Plan?, Employee Stock Option Plan definition, Employee Stock Option Plan family office, Employee Stock Option Plan term, define Employee Stock Option Plan, Employee Stock Option Plan wealth management, Employee Stock Option Plan multi-family office, Employee Stock Option Plan single family office

Leave Your Response

* Name, Email, Comment are Required

We run the Family Offices Group, the #1 largest family office association with 84,000+ global members. We offer live events, a bestselling book, Webinars, a family office database, and a family office training & certificate program called the Qualified Family Office Professional (QFOP). To get to know us please watch this 2 minute video, and contact us any time during pacific business hours by calling (212) 729-5067 or emailing us at Clients@FamilyOfficesGroup.com.

Free Family Office Report (PDF)

Contact Details for 1,000 Family Offices in Excel