An employee stock ownership plan (ESOP) is an employee-owner program that provides a company's workforce with an ownership interest in the enterprise. As businesses opt for indirect salary-based methods of rewarding staff performance, ESPO’s are gaining popularity and are being used as a means to retain staff and improve performance. Business owners are also finding the offer to be an effective way of encouraging employees to invest in the company they work in.
For all the benefits the programs can offer a company, the technical design of the ESOP is critical to the success of a plan. In determining whether an ESOP or a more short-term strategy is appropriate Cleave Accounting partners with clients to review its remuneration policy and framework from a holistic perspective.
If a company is looking to achieve a targeted more short term result, Cleave Accounting can investigate some other shorter term strategies with their clients. One example is a strategy that may involve linking annual bonuses to KPI performance.
There are a wide variety of design options to reward employee performance with an ESOP or otherwise, and Cleave Accounting has the experience to formulate a range of ideas that are most appropriate for the needs of the business and individual.