trends in espp design - computershare€¦ · presentation is general in nature and based on...

TRENDS IN ESPP

DESIGN

ESPP Offerings

1

› All Things ESPP Webinar Series www.computershare.com/allthingsespp

› ESPP Day Conference February 8, 2018 | New York, NY www.computershare.com/esppday

http://www.computershare.com/allthingsespp

http://www.computershare.com/esppday

Disclaimer

2

This webinar and the views expressed herein are not intended to provide legal, tax, accounting or other professional advice. The information contained in this presentation is general in nature and based on authorities that are subject to change. Applicability to specific situations should be determined through consultation with your legal and/or tax advisor.

Asking Questions

3

Enter your question into the Questions pane on the GoToWebinar Control Panel.

4

Introductions

Julia Franke, CEP Associate Director, AON Equity Services

TRENDS IN ESPP

DESIGN

Prepared by Aon Aon is part of Aon Hewitt, a business unit of Aon plc.

Trends in ESPP Design

Julia Franke, CEP – Aon Equity Services

August 2017

Aon

Proprietary & Confidential

Introduction

Data

Plan Design Summary

Plan Design Details

Participation

Aon


Plan design features

Plan Type

Non-qualified

423B Qualified

Look-Back

No Look-Back

Look-Back

Discounts

0% - Employer Match

0% - No Match

5%

10%

15%

Other

Length of Purchase Period

Annual

Monthly

Quarterly

Semi Annual

Other

Aon


Plan Type

423B Tax-Qualified plans showed higher average annual contributions and higher participation rates

Non-qualified

423B Qualified

Aon


Plan Type

423B Tax-Qualified plans showed higher average annual contributions and higher participation rates

16%

17%

18%

19%

20%

Non-Qualified 423B Qualified

Ave

rag

e P

art

icip

ati

on

Ra

te

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


Ave

rag

e A

nn

ua

l C

on

trib

uti

on

Aon


Plan Type by Market Cap

0%

5%

10%

15%

20%

25%

30%

Small Cap Mid Cap Large Cap

Pa

rtic

ipa

tio

n R

ate

s


Aon



Longer purchase periods lead to higher contributions and participation up to a point (semi-annual), after which longer periods lead to lower contributions and participation

Annual

Bi-Weekly

Monthly

Quarterly

Semi Annual

Other

Aon



Annual contribution amounts follow a similar pattern as the participation rates

0%

5%

10%

15%

20%

25%

30%

35%

Monthly Quarterly Semi Annual Annual

Ave

rag

e P

art

icip

ati

on

Ra

te

Average Participation Rate w/ Look-Back

0%

5%

10%

15%

20%

25%

30%

35%


Ave

rag

e P

art

icip

ati

on

Ra

te

Average Participation Rate w/o Look-Back

Aon


Length of Purchase Period by Market Cap

0%

5%

10%

15%

20%

25%

30%

35%


Pa

rtic

ipa

tio

n R

ate

s


Aon


Discount

Larger discounts lead to higher contribution rates and participation rates

Employer match features drives participation, but not contribution levels

0% w/o Employer Match

0% w/ Employer Match

5%

10%

15%

Other

Aon


Discount

0%

5%

10%

15%

20%

25%

30%

0% w/oEmployer

Match

0% w/Employer

Match

5% 10% 15%

Ave

rag

e P

art

icip

ati

on

Ra

te

Discount

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

0% w/oEmployer

Match

0% w/Employer

Match

5% 10% 15%

Ave

rag

e A

nn

ua

l C

on

trib

uti

on

Discount

Aon


Discount by Market Cap

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


Pa

rtic

ipa

tio

n R

ate

s

0% w/o Employer Match 0% w/ Employer Match 5% 10% 15%

Aon


Discount by Industry

0%

10%

20%

30%

40%

50%

60%

Part

icip

ati

on

Rate

s

Discount

Participation Rates vs. Discount by Industry


Aon


Look-Back

Approximately 32% of companies offer a plan with a Look-Back feature

Companies which offer plans with a Look-Back period see higher average contributions and participation rates

No Look-Back

Look-Back

Aon


Look-Back

0%

5%

10%

15%

20%

25%

30%

No Look-Back Look-Back

Ave

rag

e P

art

icip

ati

on

Ra

te

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


Ave

rag

e A

nn

ua

l C

on

trib

uti

on

Aon


Look-Back by Market Cap

0%

5%

10%

15%

20%

25%

30%

35%


Pa

rtic

ipa

tio

n R

ate

s


Aon


Look-Back by Industry

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Av

era

ge Y

earl

y C

on

trib

uti

on

s

Average Yearly Contributions vs. Look-Back by Industry


Aon


Participation by Domicile

• Computershare provided enrollment data for 115 different companies in 186 different domiciles

• The 186 domiciles are predominantly different countries, except for the USA, which is broken down into domiciles by state/territory

• Aon has used this data to analyze participation rates by domicile

• For example, there are 5,403 eligible participants in Alaska and 874 are enrolled

• Therefore, the domicile of Alaska was assigned a participation rate of 16.18% (874 / 5,403)

• The overall participation rate across all domiciles is 11.32%

Aon


Weighted Average Participation Rate by Continent

• The participation rate of eligible participants is fairly consistent throughout the US and Internationally

• The overall average participation across all Domiciles is 11.32%.

• Europe and North America have lower participation rates compared to the other continental regions across the world.

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Europe North America Oceania Africa Asia South America

Aon


0%

5%

10%

15%

20%

25%

30%


Pa

rtic

ipa

tio

n R

ate

s

Look-Back No Look-Back

Look-back by Continent

Aon


Discount by Continent

0%

5%

10%

15%

20%

25%

30%


Pa

rtic

ipa

tio

n R

ate

s


Aon


Purchase Period by Continent

0%

10%

20%

30%

40%

50%

60%

70%


Pa

rtic

ipa

tio

n R

ate

s


Aon


Contact Information

Julia Franke, CEP

Associate Director

Aon Equity Services

[email protected]

(215) 589-5558

mailto:[email protected]

trends in espp design - computershare€¦ · presentation is general in nature and based on...

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