Educating Employees on Your ESPP

A well-developed educational program is one of the most critical factors that can contribute to the success of a company’s employee stock purchase plan. Unlike stock options and restricted stock awards, an ESPP requires employees to actively choose to participate. Not only must employees sign up for the plan, they have to further agree to contribute funds to the plan out of their paychecks. None of this is going to happen if employees don’t understand the plan and the benefits of participating in it. This How-to-Guide provides an overview of the contributors and components of an educational program for a Section 423 qualified ESPP offered to U.S. employees.