An ESPP offers tremendous benefits to both the company and participating employees. While offering this plan enhances the company's ability to attract and retain talent, this same talent will be looking at what advantages and benefits they will receive by investing in the ESPP.
Participant employee benefits
Discounts
Many ESPPs provide participating employees with a share purchase discount, with 15% being the most common discount offered through these plans. For example, a company’s market value share price is $100 per share. While other investors would pay the full price, participating ESPP employees have the advantage of purchasing stock at $85 per share yet receiving full value at purchase.
Savings
ESPPs Offer a convenient way for employees to potentially generate extra cash and develop a habit of saving and investing with minimal effort. Contributions are deducted directly from participating employees’ paychecks, eliminating the need for additional steps. This simplified approach practically automates a savings plan, eliminating the temptation to spend what can be invested.
Ownership
An employee participating in a company's ESPP holds stock in the company, providing them with an ownership stake. Owning a piece of the company often results in increased employee engagement and morale as well as greater commitment to the company. Participants want their stock price to go up and in turn will work hard to achieve company goals and objectives.
Tax benefits
Depending on the plan type and structure, participants may qualify for certain tax benefits. Qualified plans allow participants to defer taxes if shares are held, rather than sold or transferred, for a specified period.
Boost employee performance with an employee-centric ESPP offering that aligns with your business goals and objectives.