9 Ways ESOPs Benefit Employees

Employee Stock Ownership Plan

Millions of working Americans are part of ESOPs, and its easy to see why.

An Employee Stock Ownership Plan (ESOP) is an employee benefit plan in which company shares are allocated to individual employee accounts. ESOPs put the power in employees hands. The more employees put in, the more beneficial their involvement in an ESOP becomes over time.

What benefits does an ESOP provide employees?

1. Ownership in the Company

ESOPs foster a sense of ownership throughout the company. Employees are able to see first-hand how they affect the companys bottom line and their own end result.

2. Wages and Benefits

On average, ESOP employees have higher wages. Plus, benefits tend to be better in an ESOP than those of a publicly owned company.

Pen with cap removed sitting on top of a pile of printed financial reports

3. Retirement

ESOP investments are focused on employee retirement plans, and offer twice the retirement benefits compared to similar firms not under ESOP ownership.

4. Tax Breaks

Stock earnings are tax exempt while they are in the trust and experience minimal taxes when cashed in by recipients.

Handshake between trade workers.

5. Accountability

As individual employees are able to see how every facet of the day-to-day business affects the overall company profit and their subsequent paycheck, a high sense of accountability is placed on each employee, from executives to entry-level positions, as everyone works together to work as efficiently as possible.

6. Motivation

A wave of motivation is sent throughout the company to reduce waste and inefficiencies to the barest minimum in order to be as profitable as possible.

Two men sitting at a table with papers and an iPad using BIM software.

7. Company Insight

Because employees are involved in company-related matters such as revenue, expense and profitability reports, they are able to see more of their companys inner workings than the average employee.

8. Efficiency Improvements

Suddenly expenses like lost tools, wasted materials or inefficient processes become more personal to the individual employees because they know avoidable errors such as these will impact their end result.

9. Be a Part of Something Bigger

In addition to the daily improvements and the end number an employee receives on their paycheck, ESOPs take it a step further for employees by giving them a chance to be a part of something bigger than themselves. Its more than just another job when youre an employee-owner.

Are you motivated to be an employee-owner in the company you work for? Learn more about the ESOP opportunities and positions available at Custom Aire today.

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