New research finds that satisfaction with equity compensation increased in the past year and continues to be a critical tool to attract and retain talent, yet many participants still don’t understand how to make the most of the benefit.
According to findings from Morgan Stanley at Work’s second annual Stock Plan Participant Survey, participant views about the value of stock plan benefits increased year-over-year, with 79% indicating they were either “very satisfied” or “somewhat satisfied” with their company’s offering, up two percentage points from 2021.
Regarding recruitment and retention, 45% of participants cite stock plan benefits as a reason they joined their company (up four percentage points) and 60% as a reason they have stayed (up two percentage points). What’s more, 71% say stock plan benefits are a way for their company to recognize their accomplishments, which is also up two percentage points.
“Amid a continuing tight labor market, it is not surprising that while equity valuations have decreased, the value participants place on equity compensation has increased and remains a competitive workplace benefit to attract and retain top talent and drive employee satisfaction,” observes Scott Whatley, Managing Director and Global Head of Equity Solutions at Morgan Stanley at Work.
That said, most participants still are not very confident about how to maximize the financial benefit of their equity awards. While progress has been made with educational efforts, the firm notes that there is more work to do, as the majority still does not understand the tax implications and other features. For instance, more participants say they understand key topics like:
- how taxes impact stock plan benefits (39%, up from 34%);
- how to maximize the financial benefit from their stock plan benefits (38%, up from 33%); and
- how to seek guidance (46%, up from 41%).
Guidance Welcome
Consequently, participants are looking for educational content around equity, retirement and investing. Respondents reported they were “somewhat or very likely” to attend education sessions on stock plan benefits (70%), retirement (68%), advanced investing (67%), investing (60%) and general financial wellness (57%).
Professional guidance is also highly sought after, according to the findings. Slightly more than two-thirds (67%) of participants said that, if their company offered access to financial professionals to help with investing-related questions, they would use this benefit.
In addition, nearly as many (65%) said they would seize the opportunity to work with a financial advisor for comprehensive financial planning if offered through the workplace. Access to financial coaching on topics such as budgeting, credit and debt management ranked third (53%) as a benefit they would be most likely to use.
“Education and guidance remain key to help both employers and their participants unlock the full potential of their stock plan benefits, as there is no better way to reap the full rewards of your plan than by ensuring the participant population fully understands and embraces it,” Whatley further emphasizes.
Data from the survey comes from an in-house survey of 86,000 Morgan Stanley and E*TRADE active, U.S. domestic stock plan participants. The survey was conducted on behalf of Morgan at Stanley at Work using an online survey between Sept. 22 and Oct. 4, 2022.
