Survey Shows ESPPs Remain Key Part of Equity Strategies

Results from the 2011 National Association of Stock Plan Professionals/Deloitte Consulting survey show that employee stock purchase plans (ESPPs) continue to be an important part of public companies' equity strategies. The 598 respondents to the survey were all from publicly traded companies and were broadly distributed among industries. Twenty-eight percent had 10,000 or more employees and 31% had fewer than 1,500. Fifty-two percent of the responding companies have ESPPs, 82% of which are Section 423 plans. Of the remaining 48%, 29% (14% of the entire sample) once had a plan but eliminated it. Section 423 plans tended to have higher participation rates, though only a quarter have more than 40% of employees participating. By contrast, 38% of nonqualified plans have 0 to 10% participation. Over two-thirds of qualified plans offer a 15% discount. Nonqualified plans are more evenly split, with many offering a 15% discount and an equal number offering no discount.