TY - JOUR
T1 - Employee stock purchase plans
AU - Engelhardt, Gary V.
AU - Madrian, Brigitte C.
N1 - Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2004/6
Y1 - 2004/6
N2 - Employee stock purchase plans (ESPPs) are designed to promote employee stock ownership broadly within the firm and provide another tax-deferred vehicle for individual capital accumulation in addition to traditional pensions, 401(k)s, and stock options. We outline the individual and corporate tax treatment of ESPPs and the circumstances under which ESPPs will be preferred to cash compensation from a purely tax perspective. We then examine empirically ESPP participation using administrative data from 1997-2001 for a large health services company that employs approximately 30,000 people. The picture that emerges from the analysis of these data suggests that there is substantial non-participation in these plans even though all employees could increase gross compensation through participation. We discuss a number of potential explanations for non-participation.
AB - Employee stock purchase plans (ESPPs) are designed to promote employee stock ownership broadly within the firm and provide another tax-deferred vehicle for individual capital accumulation in addition to traditional pensions, 401(k)s, and stock options. We outline the individual and corporate tax treatment of ESPPs and the circumstances under which ESPPs will be preferred to cash compensation from a purely tax perspective. We then examine empirically ESPP participation using administrative data from 1997-2001 for a large health services company that employs approximately 30,000 people. The picture that emerges from the analysis of these data suggests that there is substantial non-participation in these plans even though all employees could increase gross compensation through participation. We discuss a number of potential explanations for non-participation.
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U2 - 10.17310/ntj.2004.2s.02
DO - 10.17310/ntj.2004.2s.02
M3 - Review article
AN - SCOPUS:3142680223
VL - 57
SP - 385
EP - 406
JO - National Tax Journal
JF - National Tax Journal
SN - 0028-0283
IS - 2 II
ER -