15.3 ESPP Remix: The Case for a Non-Qualified Plan and Creative Design
Why have US companies long stuck to the same tune of IRC Section 423 Qualified Plans? Sure, it provides a framework for a potentially successful program, but are the tax benefits and complications truly worth the limitations on design creativity? Instead of putting the choice for a Qualified Plan on repeat, it's time for companies to march to the beat of their own drum by reconsidering their objectives and which plan features best reach those goals. It’s also time to think about ways to creatively use familiar vehicles (RSUs) in a “purchase” or “opt in” framework such as Axon did with their eXponential Stock Purchase Plan (“XSPP”). A Non-Qualified ESPP and other innovative solutions provide the necessary flexibility to increase employee participation and engagement and still deliver a valuable benefit. It’s time to create plans that truly promote culture and ownership mentality. With a fresh look, you might just find an alternative route that is better for your company.
, UBS (US)
, Accenture (US)
, Infinite Equity (US)
CPE Credit: 1.0
Field of Study: Specialized Knowledge
Level: II, III