Which of the following statements is true regarding an employee stock ownership plan (ESOP)?
A) Under this plan, employees acquire stock, often at below-market prices.
B) Research on ESOPs indicates that it does not affect employee satisfaction.
C) ESOPs for top management tend to increase unethical behavior.
D) Research on ESOPs indicates that ESOPs drastically improve employee performance.
E) ESOPs are also called competency-based pay plans.

Question

Quizplus · Accepted Answer

An ESOP is a type of employee benefit plan in which employees acquire ownership in the company by receiving stocks, often at below-market prices.

Option B and C are incorrect as there is conflicting research on the effect of ESOPs on employee satisfaction and ethical behavior.

Option D is an extreme statement as ESOPs may have positive effects on employee performance but not necessarily drastically.

Option E is incorrect as ESOPs are not synonymous with competency-based pay plans.

Which of the Following Statements Is True Regarding an Employee