Sustainability of employee ownership: the role of capital structure in ESOP plan terminations

What is it about?

Every year there are around 250 ESOP conversions, but the total number of ESOP firms has been slightly declining in the recent years, suggesting that there are issues with terminations of ESOP plans. This paper explores this phenomenon.This paper looks at how the rules that define the internal function of the ESOP model affect the sustainability of ESOP plans over time. The paper proposes certain solutions that should help improve the sustainability of the employee ownership in the market economy.

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