Here's what you need to know about stock plan participants

Stock plan benefits can be an effective tool to attract and retain employees, but many workers lack the confidence and knowledge to effectively manage that benefit, according to a new study by Morgan Stanley at Work.

Morgan Stanley noted that the shifts in employment resulting from the coronavirus pandemic place a great deal of pressure on companies to attract and retain employees. As workers cite better pay and benefits as a motivating factor in changing jobs, stock plan benefits may be a powerful advantage for companies attempting to compete for employees, the company said.

To help companies understand how better to leverage equity to help engage their workforce, Morgan Stanley at Work conducted a twenty-question study of 40,000 domestic stock plan participants.

The company found that:

• Stock plans can be a powerful incentive for employees to join a company or stay there: 40% said the stock plan was a reason they joined their company, 48% said that it was a reason they stayed and 69% said they believed that the stock plan was a way to recognize their accomplishments.
• Most respondents—two-thirds—said that they feel confident in their ability to access their stock plan account, but only half said they knew how to sell stock plan shares. And just over a third of the respondents knew how to estimate the possible tax impact of that benefit.
• Two-thirds also said that they are not confident in maximizing the potential financial benefits of their stock plan and Morgan Stanley said that many employees said they believe their companies should help them do so.
• 78% of those responding to the survey said they were highly satisfied with their stock plan.
• Asked what they do when the log onto their stock plan account, 78% of those responding said they looked at their balance, 56% said they examine the plan details, such as their vesting date and the price of the stock, just over a third said they look at or download a tax document, and 30% said they sold their shares, exercised an option or placed a trade.
• 40% of the respondents said they had not sold shares or exercised options. Of those who had sold shares, 28% said they deposited the funds they received for the sale into a savings or checking account.

Stock plan participants were eager to learn more about their stock plan benefits and were looking for resources to do so. And nearly two in three respondents said they were interested in attending an education session on equity, investing and retirement, Morgan Stanley said.