How are ESOPs used?
The most common uses of ESOPs are to buy the stock of a retiring owner in a closely held company and as an extra employee benefit or incentive. Other companies have used ESOPs as a technique of corporate finance to help finance an expansion, make an acquisition, spin off a division, or take a company private. In a very small percentage, approximately 2 percent, ESOPs have been used to buy out an existing firm that would have otherwise closed.
