Legal Definitions - stock bonus plan

A stock bonus plan is a type of profit-sharing plan where the employer distributes benefits in the form of their own company's stock. This means that employees receive a portion of the company's ownership, which can increase in value over time.

Let's say that a company has a stock bonus plan in place for its employees. At the end of the year, the company decides to distribute $10,000 worth of stock to its employees. If there are 100 employees, each employee would receive $100 worth of stock.

Over time, if the company's stock price increases, the value of the employee's stock bonus will also increase. This can be a great incentive for employees to work hard and help the company succeed, as their own financial success is tied to the success of the company.