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Examining Equity Plan Participant Attitudes and Behaviors

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November 14, 2019 | Jennifer Namazi

Examining Equity Plan Participant Attitudes and Behaviors

Across my desk this week – Charles Schwab’s Stock Plan Services released results of research they’d conducted on the attitudes and behaviors of 1,000 equity plan participants. Some interesting findings were reported, a few of which I’ll summarize here.

According to Schwab’s press release on their research results, the study was comprised of equity compensation plan participants who currently receive incentive stock options, or restricted stock awards and/or participate in the employee stock purchase plans (ESPPs). The following are things that they learned from participants:

Equity Compensation is a Long Term Asset

  • 60% say they will use equity compensation to help finance retirement
  • Equity compensation makes up 27% of an employee’s net worth, on average (41% of net worth for millennials)
  • By comparison, only single digit numbers of respondent cited using equity awards to finance their children's education (9%), short term lifestyle (8%), and debt payoff (5%) 

Employers Take Note: Equity Compensation is a Very Important Benefit

  • 31% say it’s an “essential” benefit; 44% rate is as a “very important” benefit (that’s a high importance ranking from at least 75% of plan participants)
  • Some of the advantages of equity compensation cited by respondents were that it allows them to participate in growth of the company (51%) and allows them to significantly build and increase wealth (50%).
  • 28% of respondents said that equity compensation was the reason or main reason for taking a particular job

Participants Want More Education

  • Most of the respondents in the Schwab survey (82%) said they’d like their employer to offer more education to understand their equity programs.
It appears most of the desire for education centers around retirement and financial planning. Financial wellness has become a topic that has penetrated employee benefit conversations in recent years. While it may not be something that the employer provides directly – via in house resources – there certainly may be opportunities for issuers to engage their third party vendors to assist in providing this type of education to participants.

Schwab’s summary of their findings can be found here.


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