Question

Electrix Inc. is an electrical appliances manufacturing company. It distributes shares of stock to its employees by placing the stock in a trust managed on the employees' behalf. Which of the following has been implemented by Electrix in this scenario?

Answer 1

Answer:

Employee stock ownership  plan

Explanation:

An employee stock ownership plan (ESOP) is a retirement plan wherein the employer contributes its shares (or funds to purchase its stock) to the fund for the advantage of the employees of the company.

The company maintains an account for every employee who participates in the program.

Over time stock shares accumulate before an employee is eligible to them.

With an ESOP, while still working with the company, you never purchase or keep the stock directly.

If an employee is fired, decides to retire, is disabled, or dies, the company must transfer the stock shares in the account of the employee.