Companies can issue stock options using various plans (employee stock option plans i.e ESOP). Under the trust plan, the legal ownership of shares is granted to a trust created specifically for this purpose, which will then issue shares to employees of the company.

The Trust acts as an intermediary between the company and employees to implement the ESOP.

Employees who are issued stock options under this plan are granted all the economic benefits of ownership of shares although legal ownership remains with the trust.