Employee Stock Ownership Plans And Shareholder Wealth: An Examination Of The Market Perceptions Of The Non-Tax Effects

Abstract

As a means of achieving broad social and economic objectives, Congress has provided tax incentives designed to encourage Employee Stock Ownership Plans (ESOPs). The purpose of this study is to determine if some of the observed market reaction to ESOP adoption may be attributed to nontax benefits of ESOPs. This studys findings indicate that the securities market does perceive positive benefits from an ESOP other than from the tax benefits provided by Congress.