Are Companies Really Cutting Back on ESPPs?

The evidence remains mixed on whether companies really will cut back in any significant way on their employee stock purchase plans (ESPPs). In a recent survey of 46 public companies that filed new or amended ESPPs, Equilar, Inc. found that 11% offered a three-month or less lookback, 39% had a six-month lookback, 20% had a 12-month lookback, 15% had a 24-month lookback, and 13% had no lookback. Only three of the companies offered no discount on the share price. All the other companies offered a 10% to 15% discount on the price at the beginning or end of the lookback period.

These numbers are not statistically different from what the NCEO found in its 2000 survey of ESPPs. While the Equilar sample is small, and companies may yet make more changes, increasing evidence suggests that the new accounting rules will not have as dramatic an impact on ESPPs as many people initially believed.