Employee Stock Ownership Plans (ESOPs) were developed as a way to encourage capital expansion and economic equality.
They may be either: In the mid-19th century, as the United States transitioned to an industrial economy, national corporations like Procter & Gamble, Railway Express Agency, Sears & Roebuck, and others recognized that someone could work for the companies for 20 plus years, reach an old age and then have no income after they could no longer work.
In 1956, Louis Kelso invented the first ESOP, which allowed the employees of Peninsula Newspapers to buy out the company founders.
[2] Chairman of the Senate Finance Committee, Senator Russell Long, a Democrat from Louisiana, helped develop tax policy for ESOPs within the Employee Retirement Income Security Act of 1974 (ERISA), calling it one of his most important accomplishments in his career.
[3] ESOPs also attracted interest of Republican leaders including Barry Goldwater, Richard Nixon, Gerald Ford, and Ronald Reagan.