Enabling the acquisition of treasury stocks by all employees
Significance of the System
What are employee stock ownership plans (ESOPs)?
An ESOP enables a company’s employees to acquire and hold treasury stocks (ESOP shares) of their employer company or parent company. The system is supported by the employer company or the government to improve labor welfare and the economic and social status of employees.
- Countries around the world including the US and the UK are implementing the ESOP system for various purposes such as improving labor welfare and strengthening cooperation between labor and management.
Stock options are similar to the Korean ESOP system in that they compensate for a worker’s good performance by allotting treasury stocks to him/her, but the two systems are different because stock options only give the right to acquire treasury stocks to specific workers while the Korean ESOP system gives the right to all employees.
