The incentive value of employee stock ownership plans (ESOP) stock awards or purchases is based on the idea that employee owners will be motivated to work hard so that the organization will perform well and its stock price will rise.

Question

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ESOPs provide employees with stock ownership, often at no upfront cost to the employee, which aligns their interests with those of the company shareholders. The incentive lies in the potential increase in stock value, motivating employees to contribute to the company's success, as this will directly benefit them through the appreciation of their stock holdings.

The Incentive Value of Employee Stock Ownership Plans (ESOP) Stock