What type of profit-sharing plan involves the awarded shares of stock as part of the incentive plan?
A) cash plan
B) Lincoln incentive system
C) Jefferson incentive system
D) ESOP

Question

Quizplus · Accepted Answer

ESOP (Employee Stock Ownership Plan) involves the awarded shares of stock as part of the incentive plan. In this plan, companies set up a trust fund and contribute new shares of its own stock, or cash to buy existing shares, to the trust. The trust then allocates the shares to employees' accounts, which they can access upon retirement or separation from the company. This incentive plan encourages employees to work harder to benefit the company as they have a stake in their company's performance.

What Type of Profit-Sharing Plan Involves the Awarded Shares of Stock