Really Dumb



ESOP stands for an Employee Stock Ownership Plan. It’s a type of retirement plan that gives employees an ownership stake in the company. This means that when the company does well and the stock price increases, the employees benefit too. For example, let’s say you work for a company that has an ESOP plan. Every year, the company gives you stock in the company that you can save for your retirement. Then, when you retire, the stock you have is worth more money than when you got it. That extra money is like a bonus for being loyal to the company. An analogy you can use to better understand ESOPs is a savings account. Like a savings account, when you put money in, you get interest and the money grows over time. With ESOPs, instead of putting money in, you get stock in the company and the value of the stock grows over time. Here’s a fun fact to help you remember ESOPs: “Employees with stock ownership plans (ESOPs) can benefit from their company’s success and enjoy a retirement with a pot of gold at the end of the rainbow!”