An Employee Stock Ownership Plan (ESOP) in the United States is a defined contribution plan, a form of retirement plan as defined by 4975(e) of IRS codes, which became a qualified retirement plan in 1974. It is one of the methods of employee participation in corporate ownership.

ESOPs are regulated by the Employee Retirement Income Security Act (ERISA), a federal law that sets minimum standards for investment plans in private industry. Internal Revenue Code section 404(a)(3) provides for an annual limit on the amount of deductible contributions an employer can make to a tax-qualified stock bonus or profit-sharing plan of 25% of the compensation otherwise paid or accrued during the year to the employees who benefit under the plan.