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Hi, Vickifool,

wow. This sounds bizarre to me. Obviously, I've never heard of anything like this.
Neither had I, actually, until I started working for this particular employer. And even this is a new 'enhancement' to the plan started in the last couple of years. In the 'all hands' meetings they had to announce it, I believe they mentioned that they requested and received an IRS Private Letter Ruling to assure of the plans legality, and they were making a big deal about it being the first of its kind plan in the country.

The employee stock purchase plan I'm familiar with just enables you to automatically buy stock at a bargain price.
I don't think we have that option. We do have a no cost employee DRiP plan, we do get company stock contributed to our ESOP/Profit Sharing retirement accounts by the company, and we can buy more company stock inside our 401(k)s, but all the common stock we can get is bought at market price. No discounts.

I'm guessing that your company is NOT publicly traded.
Actually, it is publically traded - and a component of the Dow Jones Industrial Average.

So when your ESOP dividends equal your paycheck, you can retire at "full pay?"
In theory, I guess. If I last that long. I'm in information technology, and a large chunk of my IT colleagues have recently been outsourced. My boss' boss is regularly in meetings defending our department's existance to the people who control the budgets. I continue to hope that I'll be able to stay with the company until retirement, but I am making concrete plans to enable myself to enter an alternative career should my hopes be dashed.

Additionally, if memory serves me correctly, the law still limits employer contributions to retirement accounts. The compensating contribution that enables the 'dividend in lieu of salary' payment to not reduce the value of my retirement account counts as an employer contribution. The limits would kick in before my entire salary would get replaced by dividends, and I'm not sure what the company's policy is in that eventuality. Although that wouldn't be a really bad problem to have, it will likely be a few decades before I'd have to face that question.

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