Interviewing at Accenture and see that they offer an employee stock option purchase plan. Can anyone explain how this works, and whether this is actually a good benefit to have? Thanks in advanced.
It’s free money, you should max it out.
The plans vary by company but often it looks like this:
- Purchase shares at a discount, e.g. 10%
- You select to participate with a horizon of e.g. 6 months. For example on Feb 1 you participate with a horizon date of Aug 1. Youll see paycheck deductions during that time, and after 6 months will receive shares based on the best market price on either Feb 1 or Aug 1.
- It’s usually capped to 10-20% of your salary. So if you make 150k base and the discount is 15% and the salary cap is 10% then your “free money” is 150k*.15*.10 = $2250. If the stock rises over the time period you get all the gains, but no losses if it drops.
The benefit is two-fold: you get the pure discount and a best-of “temporal optimum”. There is probably a better term for this.
It’s free money, you should max it out. The plans vary by company but often it looks like this: - Purchase shares at a discount, e.g. 10% - You select to participate with a horizon of e.g. 6 months. For example on Feb 1 you participate with a horizon date of Aug 1. Youll see paycheck deductions during that time, and after 6 months will receive shares based on the best market price on either Feb 1 or Aug 1. - It’s usually capped to 10-20% of your salary. So if you make 150k base and the discount is 15% and the salary cap is 10% then your “free money” is 150k*.15*.10 = $2250. If the stock rises over the time period you get all the gains, but no losses if it drops. The benefit is two-fold: you get the pure discount and a best-of “temporal optimum”. There is probably a better term for this.