The main advantage for an employer in setting up an employee stock ownership plan is
A) increased protection against union organizing attempts.
B) reduction of financial risk for employees and consequent reduction in employee turnover rate.
C) increased employee productivity.
D) favorable tax treatment on earnings earmarked for use in the ESOP.

Question

Quizplus · Accepted Answer

The main advantage for an employer in setting up an employee stock ownership plan is the favorable tax treatment on earnings earmarked for use in the ESOP, which can help the company reduce its tax liability. This can be a significant benefit for the employer as it can increase profits and provide more resources to invest in the growth of the company. Additionally, the ESOP can help to align the interests of employees with those of the company, leading to increased productivity and better performance.

The Main Advantage for an Employer in Setting Up an Employee