Employee Stock Purchase Plans (ESPPs)

An Employee Stock Purchase Plan is a qualified plan under Section 423 of the IRS Code, which allows eligible employees to purchase their Company's stock at a discount. An ESPP allows eligible employees to purchase their Company's stock at a discount, typically at approximately a 5% discount of Fair Market Value. 

Stock is purchased as a payroll deduction; employees are not taxed until the sale of the stock, at which time, income is recognized as a capital gain, if appropriate. 

In addition to the potential financial benefits of Employee Stock Purchase Plans for employees, ESPPs also provide intrinsic reward and motivation for employees to acknowledge their contribution to the ultimate success of the company.  From a company’s perspective, ESPPs provide a vehicle by which to provide incentives, without depleting liquid assets.

To find out more about how Compensation Resources, Inc. can help your company with Employee Stock Purchase Plans (ESPPs),  please contact us or call us directly to speak with one of our compensation consultants at 877-934-0505.