employee share ownership plan employee share ownership plan(ESOP) A method of providing the employees of a company with shares in the company. The ESOP buys shares in its sponsoring company, usually with assistance from the company concerned. The shares are then allocated to employees who satisfy certain performance targets. The advantage claimed for ESOPs is that they do not require dilution of the sponsoring company’s share capital by the creation of new shares. In the USA they are known as employee stock option plans. See alsoemployee share ownership trust; share incentive scheme; share option. |