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- Title
The Art and Science of an ESOP.
- Authors
Parks, John P.
- Abstract
The employee stock option ownership plan (ESOP) is flourishing as both a viable employee benefit program and an employer financing tool. The growth of ESOP is expected to continue, as indicated by the creation of special tax provisions for these employee benefit package. Some factors, however, could render ESOPs inappropriate. These factors include dilution associated with contributing stock to the trust, repurchase liability, and voting control. If appropriate, an ESOP has some tax advantages for employers. The most obvious advantage is receiving a tax deduction with the cash drain usually associated with deductions. This article also offers information on determining the value of ESOP stock. To illustrate the benefits of ESOPs, a case study of ESOP implementation and administration at Diskriter Inc. is presented.
- Subjects
EMPLOYEE ownership; EMPLOYEE stock options; TAX deductions; EMPLOYEE benefits; BUSINESS finance; DISKRITER Inc.
- Publication
Benefits Quarterly, 1991, Vol 7, Issue 2, p23
- ISSN
8756-1263
- Publication type
Article