Employee Stock Ownership Plan (ESOP) Calculator

Formula

The formula to calculate the value of an Employee Stock Ownership Plan (ESOP) is:

\[ ESOP = TSO \times PPS \]

Where:

$ ESOP $ is the total value of the employee stock ownership plan ($)
$ TSO $ is the total number of stocks offered in the plan
$ PPS $ is the price per share at the time of receiving the stocks ($/share)

What is ESOP?

An Employee Stock Ownership Plan (ESOP) is a benefit plan offered to some employees of companies that provides those employees with a number of stocks in the company. Those stocks can be issued immediately or held for a later date. Providing employees with part ownership in the form of stocks helps align the interests of the shareholders with the interest of the employee since the employee is now a part-owner.

Example Calculation

Let's assume the following values:

Total Number of Stocks Offered (TSO) = 1000
Price Per Share (PPS) = 50

Using the formula:

\[ ESOP = 1000 \times 50 = 50000 \]

The value of the Employee Stock Ownership Plan (ESOP) is \$50,000.