Employee Benefits Law Group

Guidance. More than just Legal Advice.

Employee Benefits Law Group
Home > Resources > ESOP > Can Employees Be Given The Election To Reinvest Dividends In ESOP Stock In More Shares In The ESOP?

Can Employees Be Given The Election To Reinvest Dividends In ESOP Stock In More Shares In The ESOP?

by

In this video, Kevin Long discusses the dividend reinvestment election for ESOPs.

 

Transcript

ESOP participants can certainly be given the opportunity to elect to invest ESOP dividends in employer stock within the plan.  However, more often than not the use of dividends within the plan is dictated by the need of the trustee to use the dividends for payments on an ESOP loan or the ESOP will pass through the dividend to participants.  The dividend reinvestment election is much more prevalent for public company ESOPs that are buying shares on the open market.

Learn More About ESOP Dividends

The National Center For Employee Ownership (NCEO) offers information on the deductibility of dividends paid on ESOP-held stock in ESOP Tax Incentives and Contribution Limits.

About Employee Benefits Law Group

Employee Benefits Law Group is a deep and diverse team of experts working to make your life easier and improve your outcomes in every aspect of employee benefits. Our clients know we listen, probe and understand their challenges and objectives. We ask the questions they didn't know needed to be asked. They count on us to deliver solutions that become part of their company's overall success.

Meet the Team

EDITOR’S NOTE: We did the best we could to make sure the information and advice in this article were current as of the date of posting to the web site. Because the laws and the government’s rules are changing all the time, you should check with us if you are unsure whether this material is still current. Of course, none of our articles are meant to serve as specific legal advice to you. If you would like that, please call us at (916) 357-5660.