Equity plans: The benefits for your company and employees

Company stock plans can be a valuable component in your overall compensation and benefits offering—for both your company and your employees. For employers, equity plans can be used as an incentive to help attract and retain employees in today’s competitive war for talent. And, for employees, receiving equity awards can help them feel more valued, motivated and happier in their positions while offering the opportunity to add to their compensation.

Many employers and employees view equity compensation plans favorably for their role in helping to create an ownership culture. With the value of an employee’s equity compensation directly linked to the company’s performance, employers often see equity plans as a way to encourage teams to contribute their best work toward meeting business objectives. In fact, research shows a correlation between equity compensation and company success. According to the 2017 Global Equity Insights Survey from the Global Equity Organization (GEO), employee participation in long-term incentive plans may be positively related to company performance.1

While offering an equity compensation plan has many benefits, ensuring employees understand the value of their awards and how to use them is critical. Corporations may invest a lot—both in terms of money and resources—in equity compensation plans but can fall short on an essential element for plan effectiveness: comprehensive education emphasizing the actions that could be taken to maximize award benefits. Offering access to an advisor to assist executives with integrating their awards into their overall financial strategy can also add a lot of value. Because your employees can’t value what they don’t understand, making education a key part of your plan is vital to optimizing its impact.

At Bank of America Merrill Lynch, we recommend a communications plan that is:

Simplified, using plain language with concise explanations and clear calls to action.
Accessible, leveraging multiple channels—online, in person, on demand, via phone.
Integrated, emphasizing a holistic view factoring in retirement, health care and other financial benefits.

Talk with your Bank of America Merrill Lynch representative today about how an equity program can help you meet your company goals, and discuss solutions to help ensure a fully optimized benefit.

1 2017 Global Equity Insights Survey, May 2017.