A tax deductible bonus plan according to which employers contribute to a trust for later use for employees is classified as?
Correct answer: B. employee stock ownership plan
- A. early retirement window plan
- B. employee stock ownership plan
- C. cash balance plan
- D. severance pay plan
Explanation
An employee stock ownership plan, or ESOP, uses employer contributions to a trust to acquire and later distribute company stock for employees. The tax-deductible employer contribution is a defining feature of this plan.
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About Human Resource Management
Human resource management deals with acquiring, developing, rewarding and retaining employees within an organisation. It includes job analysis, recruitment, selection, training, performance appraisal, compensation, career planning, labour relations and workplace discipline. Recruitment attracts applicants, while selection evaluates them and chooses the most suitable candidate.
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