What do you know about ESOPs?
Abstract: This article looks at some of the basics of an ESOP — an employee stock ownership plan. An ESOP is a qualified retirement plan that invests in the bank’s own stock. A bank’s contributions to an ESOP are tax deductible, and a leveraged ESOP can be a highly tax-efficient vehicle for raising capital. Furthermore, an ESOP can be a powerful incentive for attracting, retaining and motivating employees. But there are pros and cons for S and C corporations.