How to Evaluate an Employee Stock Purchase Plan from a Recent IPO Company

Access to an employee stock purchase plan that offers a lookback provision and a discount is often a great benefit for employees. If you can afford to contribute, these two features may allow you to.

An employee stock purchase plan is a company-sponsored benefit that gives employees a convenient way to purchase company stock. Typically funded through payroll deductions, an ESPP can be a great way to participate in the success of the business you work for; if the company does well and the stock price increases, employees who participate may reap the benefit of owning shares that appreciate in value. Of course, there’s a flipside to that. Owning company...

An employee stock purchase plan is an employee benefit that allows you to purchase shares of your employer’s company stock. It’s a convenient way to buy the shares, thanks to the fact that contributions are often deducted pre-tax directly from payroll. Some purchase plans offer more than convenience, too, with additional perks like discounts on the share price. This can make participation in a plan seem like a no-brainer. However, before you make the decision...

A good employee stock purchase plan (ESPP) is something that many consider being a no-brainer when it comes to deciding if you should take advantage or not. Contributing to an ESPP is often accomplished through convenient payroll deductions, and many participants benefit from features like lookback provisions or discounts to the purchase price. At first glance, participating in an ESPP that’s available to you can seem like the obvious “right” choice. But there are other...

Employee stock purchase plans (ESPP) are a convenient way to purchase company stock. In an ESPP’s simplest form, employees contribute money directly from their paychecks into an employer-offered plan. At set intervals established by the company, money contributed is used to purchase shares of stock. Those shares are then deposited into an investment account on behalf of each employee who participates. If you have an ESPP, the ease and convenience of using the plan might...

An employee stock purchase plan, or ESPP, can provide employees of a company a vehicle through which to purchase that company’s stock. This is usually done through automated payroll deductions, which makes the system convenient, and employers may offer added benefits like discounts on the market price of the shares and a lookback provision. These two features alone may make it seem like a no-brainer to participate in an ESPP if you can.  It’s another...

An employee stock purchase plan is a compensation tool that may allow you to purchase shares of company stock through convenient payroll deductions. Employee stock purchase plans, or ESPPs, can give you the opportunity to buy company stock at a discount or at a favorable price. Through the plan, you could also receive potentially preferential tax treatment on the profits should you meet specific holding period requirements for the shares you buy. If your employer...

An employee stock purchase plan (ESPP) may provide you with a convenient way to purchase company stock. Often offered via payroll deduction, you can easily allocate money to the ESPP via your paycheck (similar to how you contribute to a 401(k)). In addition, your ESPP may offer a purchase discount of up to 15% on the company stock, allowing you to purchase company stock at a lower price than what you could have in a...

An employee stock purchase plan, or ESPP, is an employee benefit that allows employees to purchase company stock via payroll deductions. If you have an ESPP, you can often purchase shares at a discounted price to the fair market value. Some companies offer a discount as high as 15%. Generally, employee stock purchase plans are offered in an effort to incentivize employees. Over time, with regular and consistent participation, an employee may be able to...

Many employers offer an employee stock purchase plan, or ESPP, to allow employees to purchase company stock with ease. As an incentive to participate, many ESPPs allow you to purchase stock at a discount from the current market price.  ESPP’s may also allow for a lookback provision, adding benefit to the employee. Each ESPP comes with its own specific set of rules, but that discount might be as much as 15% if you have a...