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Despites long history of the ESOP in Korea, ESOP has not been developed. This is because our ESOP scheme has a significant weakpoint to manage a downside risk due to a drop in treasury stock price of his own company. Employees were very reluctant to hold the treasury stock of their company for a long time. In order to activate the ESOP in Korea, we need to adopt a principal-guaranteed ESOP scheme that european countries have been long operated. This is a scheme that ESOP guarantees the principal invested for treasury stock through a hedge contract with investment bank. Under this scheme, employees have an option-like payoff structure from holding treasury stock. That is, employees can get capital gain when the stock price is up and can protect their principal even when the stock is down. This scheme can be structured in various forms using OTC option, forward, etc. What is pivotal in activating this scheme is how much a hedging cost can be minimize. This principal-guaranteed ESOP scheme can also has a more attractive a structured products when combining with the leveraged ESOP program in light of european cases. Because employees can not afford to purchase their treasury stocks even when their stock has an attractive valuation. This paper suggests some revisions of the related act to introduce this cost-minimizing principal-guaranteed ESOP scheme. First, ESOP should be permitted to directly enter into hedging contracts with investment bank that have an expertise for structuring this scheme. Second, ESOP should be permitted to lend his treasury stock to the investment banks that offer hedging contracts in order to reduce the hedging cost.