Data and Research

More Workers Rank Company Stock As Top Benefit

Latest research from Fidelity Investments reports a rising amount of employees are citing company stock as their favorite benefit.

By PLANSPONSOR staff editors@plansponsor.com | September 14, 2016

While many employees consider health insurance or a 401(k) as the most valuable work benefit, a recent study from Fidelity Investments found that may not be so true for a growing number of workers.  

According to the research, 16% of employees named company stock as their top benefit, up from 10% in 2014. A sense of ownership and loyalty plays a role in the rising participation rate, as nearly two-thirds of workers (63%) reported partaking in company stock gave them a sense of claim over their company, and 53% said their involvement added a feel of devotion toward it. Additionally, almost half (49%) of employees stated that a company stock plan was an important factor when contemplating new jobs.

“Company stock plans can be a great tool to engage employees and improve their overall financial confidence,” said Kevin Barry, executive vice president, Stock Plan Services at Fidelity Investments. “These plans can also motivate employees, as over half of respondents indicated participation in their company stock plan increases company loyalty and inspires them to work harder.”

The Fidelity study also examined the amount of time workers preserve their stock, and its ability to help people tackle major expenses. Of the 49% that sold stock acquired through their plan, 40% kept it for two years or longer. Fifty-eight percent of those surveyed reported they would sell company stock to pay a large expense, instead of borrowing from a 401(k) or home equity loan. Furthermore, only 7% said the assets acquired through stock will be a primary source in funding for retirement. Forty-two percent indicated the assets would be used as a “cushion” with other savings vehicles.

As participation rates continue to propagate, most employees (83%) expect the value of their company stock to increase. More than half of employees (52%) said they believe stock will grow at a modest rate, and more than one in five (21%) anticipate the value to increase substantially in the upcoming 12 to 36 months.  

- Amanda Umpierrez

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