A major problem with ESOPs is that

A) they carry a significant risk for employees.
B) employees are not allowed to participate in votes by shareholders.
C) the stocks within the trust are too widely diversified to earn high returns.
D) any earnings from the trust holdings are taxed at an extremely high rate.
E) they result in reduced profitability for the employees.

ESOPs

Employee Stock Ownership Plans, a program that provides a company's workforce with an ownership interest in the company.

Significant Risk

The potential for a substantial negative outcome, affecting health, safety, or the environment.

Shareholders Votes

The rights of shareholders to vote on corporate matters, such as electing directors or approving policies, typically based on the number of shares they own.