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Nearly Half of Employees Used Company Stock to Help with Personal Finances and Increase Financial Well-Being, Fidelity Study Shows

  • Employee Stock Purchase Plan
  • Employee Stock Purchase Plan

BOSTON — Employees who participate in their company's Employee Stock Purchase Program (ESPP) may have more confidence and control over their financial well-being, according to research by Fidelity Investments®. Analyzing the behaviors of more than 300,000 employees over a two-year period, Fidelity's research1 found:

  • Forty-eight percent of employees who purchased company stock through an ESPP sold all their shares within two years, demonstrating the role company stock can play within an employee's overall financial plan.
  • Despite the significant percentage of sellers, the findings showed very few people "flipped" their stock purchase: only six percent of employees that sold all of their shares did so within 10 days of purchasing the shares.
  • Employees can often purchase company stock through their ESPP at a discount, and employees in ESPPs that offer a higher discount are more likely to sell sooner – almost 40 percent of employees with a 15 percent discount sold all their shares within 90 days, compared to 25 percent of employees in plans with a five percent discount.
  • However, higher discounts contribute to higher employee participation rates. "Plans with a 15 percent discount have double the participation rates when compared to plans with a five percent discount."
  • The research also found that age can impact how employees managed stock purchased through their ESPP. More than half (57 percent) of the employees under 30 years old sold all of their shares within two years, while 58 percent of employees over 60 years old held all of the shares they had purchased.

"This research illustrates how Employee Stock Purchase Plans can play a vital role in helping employees address their personal financial needs," said Kevin Barry, executive vice president, Stock Plan Services at Fidelity Investments. "Whether it's covering short-term expenses, paying down debt, building an emergency fund, or complementing their 401(k), company stock plans can help improve employees' overall financial wellness."

Employees at Companies with ESPPs are Less Likely Borrow from Their 401(k)

In addition to helping workers manage short-term expenses and financial needs, Fidelity research2 found that employees who work for a company that offers an ESPP are less likely to take a loan from their 401(k). When faced with expenses that must be addressed quickly, cashing in shares from an ESPP may help to avoid the risks and implications associated with 401(k) loans, a move that can get in the way of reaching retirement goals and lead to reducing or stopping 401(k) contributions. In addition, the money does not have to be repaid if the employee changes jobs.

"Fidelity studies3 have shown that offering employees the ability to purchase company stock can produce positive benefits for both workers and their employers, including improved productivity and morale, as well as a sense of ownership in the company," added Barry. "It's no surprise that many workers consider ESPPs one of the most important parts of their company's benefit program."

About Fidelity Investments

Fidelity's goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.0 trillion, including managed assets of $2.0 trillion as of January 31, 2016, we focus on meeting the unique needs of a diverse set of customers: helping more than 25 million people invest their own life savings, nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with investment and technology solutions to invest their own clients' money. Privately held for nearly 70 years, Fidelity employs 45,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.

Our Company

Personal Investing

We provide financial planning and retirement options such as IRAs, annuities, and managed accounts; brokerage and cash management products; college savings accounts; and other financial services for millions of individual investors.

Workplace Investing

We work with employers to build benefit programs for their employees, and provide recordkeeping, investments, and servicing in defined contribution, defined benefit, health & welfare, and stock plan services.

Fidelity Institutional

We bring sophisticated technology and highly personalized service together to offer clearing, custody, investment products, brokerage, and trading services to a wide range of financial firms.

Fidelity Institutional Asset Management

Fidelity Institutional Asset Management is a distribution organization dedicated to the institutional marketplace. It serves consultants and institutional investors, such as defined benefit and defined contribution plans, endowments, and financial advisors.

Fidelity Charitable

Fidelity Charitable is an independent public charity that allows donors to establish a dedicated donor-advised fund to support their favorite charities in the short term and create a systematic plan for longer term philanthropic goals.

Fidelity Labs

Fidelity Labs explores emerging technology and harnesses innovation to benefit Fidelity's businesses and customers.

Discovery Ventures Program

The Discovery Ventures Program is a program focused on startups looking to grow their businesses in the financial services industry. The program is designed to help participating companies better understand how to engage with large enterprises so that they can accelerate their sales into large enterprises and significantly increase their growth.

Careers at Fidelity

Fidelity Careers Sales, relationship management, product, marketing, technology, operations, and corporate functions


Asset Management Careers Investment management and support

1. Fidelity analysis of more than 330,000 employees at 105 Fidelity clients that completed an ESPP share purchases in 2012. Employee behavior was measured as of December, 2014.
2. Analysis of 213 Fidelity clients, as of May 2014. Results based ESPP/401(k) clients (total: 119) representing 158 plans and 1.3 million active participants, as well as clients with only a 401(k) (total: 94) which represents 183 plans and 1 million active participants.
3. Survey of 2,116 stock plan participants, both US (total: 1,475) and international (total: 641), with 592 respondents under the age of 40. Survey data was collected between January 29, 2014 and March 10, 2014 by Market Probe.
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Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
Fidelity Investments Institutional Services Company, Inc., 500 Salem St., Smithfield, RI 02917
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