The Origin and History of the ESOP and Its Future Role as a Business Succession Tool  - CLEO Skip to main content


The first ESOP (employee stock ownership plan) came into being in 1956. During the 50-plus years since then, ESOPs have become a popular alternative to a sale or merger as a tool of business succession, and there are now more employee owners—approximately 10 million of them—than union members in the private sector. This article describes the origin and history of the ESOP and explains why ESOPs will increasingly become the business succession tool of choice for many owners of privately held businesses.