Stock Plan Administration, ESPP, Employee Stock Purchase Plan, Share-Based Compensation

Want employees to love your stock plan? Invest in communication.


In the past year, Fidelity surveyed participants from more than 170 public companies, focusing its analysis on perceptions by gender and age and made some interesting findings. There were some clear differences in how millennials viewed their plans versus their older colleagues as well as gender-based differences in perceptions, but the most significant driver of attitudes identified was simply the level of understanding participants had of the stock plan itself. 


According to the study, participants who feel more knowledgeable about their stock plans report higher plan satisfaction, and as a result are more loyal to their companies and are more motivated to perform. Which is good news, because it’s something  plan administrators can influence through timely communication and targeted plan education. 


How much does the participant’s understanding of their stock plan impact satisfaction?

The survey results suggest that when participants feel more knowledgeable about their stock plans, they are more likely to feel a sense of ownership in the company and losing their stock plan becomes a barrier to changing jobs. 


Here are some key findings:

  • 72% of people who feel they understand their plans are very satisfied with them.
  • Only 49% of people who don’t understand their plans are very satisfied with them.
  • Participants who feel they understand their plans feel more loyal to their employers and motivated to do their best work, all by statistically significant margins.

The big opportunity? Educate the other half.

Interestingly, while understanding their plan correlates strongly to how satisfied participants were with it, only about half of participants feel they understand their stock plans very well. 


This presents a key opportunity for employers to up their game when it comes to communications. Keep in mind, however, that  good plan education isn’t merely a matter of quantity, it’s a matter of providing the right information at the right time. 


Participants report that the plan information they need most is less about the nuts and bolts of how to accept a grant or exercise an option and more about how to make the most of an award. Yosef Siegal, head of participant engagement at Fidelity Stock Plan Services, says participants really want to know three things:

  1. How to get the most out of their plans
  2. How to incorporate their stock plans into overall financial planning
  3. What are the tax implications of selling (which only 34% of participants say they fully understand) 

“It’s not only about the right information and the right topics, but also delivering it at the right time and in the right context when people actually have decisions to make,” says Siegal.  

So if you want to maximize the benefits of offering stock plans to your organization, start by helping your  participants understand how their plans work and work for them. When your participants feel confident in their understanding of your equity plan, get timely and curated information, and understand the plan’s role in their financial futures, they are more likely to view the plan positively, buy into your organization as a whole, and become more engaged as employees. 


Get more insights from Emily Cervino and Yosef Siegal as they present more findings from the Fidelity survey by tuning in to our Webinar replay, “How Gender and Age Impact Perceptions of Equity Compensation.”

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