An ESOP-based incentive compensation plan:
A) is based entirely on productivity and quality gains.
B) resembles an Improshare plan that distributes corporate savings to workers.
C) is based on the entire company's performance and rewards employees with stock.
D) combines the best features of an individual-based plan and a team-based incentive plan.

Question

Quizplus · Accepted Answer

An ESOP-based incentive compensation plan is designed to reward employees with stock based on the performance of the entire company, not just individual productivity or team-based performance. This plan is often used to align the interests of employees with those of the company and to provide an ownership stake in the business. It is not based on productivity or quality gains alone, and it does not resemble an Improshare plan or combine the features of individual-based and team-based plans.

An ESOP-Based Incentive Compensation Plan