Employee Stock Ownership Trust (ESOT)

An Employee Stock Ownership Trust (ESOT) is a legal arrangement where a trust holds shares of a company on behalf of its employees. It’s a way for employees to gain ownership and a stake in the company’s success. The trust buys or holds shares, and employees typically receive benefits, such as dividends or the ability to purchase stock over time. ESOTs can motivate employees, align their interests with the company’s performance, and provide a retirement benefit. They are often used as a strategic tool to promote company loyalty and distribute wealth among staff.