Stock options tied to retention, but employees want more financial guidance
Over two-thirds of employees would access the help of financial professionals with financial planning and investing questions if it were available, according to a new Morgan Stanley survey.
Stock plan benefits seem to be growing in value as a reason that employees remain with an employer, according to a new survey from Morgan Stanley.
The company’s Annual Stock Plan Participant Survey for 2022 showed that offering a stock plan can help companies attract and retain employees. In this year’s survey, 45% said their current stock plan benefits were a reason they joined their company; 60% said such benefits were a reason they have stayed. And 71% said stock benefits were a way that company can recognize an employee’s accomplishments. These numbers were up from 2021, when the three responses were at 40%, 58%, and 69%, in that order.
“Amid a continuing tight labor market, it is not surprising that while equity valuations have decreased, the value participants place on equity compensation has increased and remains a competitive workplace benefit to attract and retain top talent and drive employee satisfaction,” says Scott Whatley, managing director and global head of equity solutions with Morgan Stanley at Work. “Education and guidance remain key to help both employers and their participants unlock the full potential of their stock plan benefits, as there is no better way to reap the full rewards of your plan than by ensuring the participant population fully understands and embraces it.”
Satisfaction with plans is high, but more guidance is desired
The survey of more than 86,000 active stock plan participants in the U.S. found that satisfaction with their stock benefits was high: 79% said they were somewhat (42%) or very (37%) satisfied with their company’s stock plan benefit offering. This is up from 2021, when 79% of respondents said they were very or somewhat satisfied with stock plan offerings. The survey showed that 14% of plan holders were neutral on their plans, 5% were somewhat dissatisfied, and 2% were very dissatisfied.
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A clear theme found in the survey was that employees desire more help with their stock plan benefit. The survey found that 78% of employees said they knew how to access their stock plan account, but only 39% said they understood how taxes may affect their benefits, while 38% said they understood how to potentially maximize the financial benefit from their plans. In addition, less than half (46%) said they knew how to get in touch with someone if they had questions about the plan.
Survey respondents also indicated the benefits they were most likely to use were comprehensive financial planning with an advisor (65%); access to financial professionals for help with investing questions (68%); and access to financial coaching on topics such as budgeting, credit, and debt (53%).
High use of online portals and resources
The report showed that 91% of respondents said they logged on to their stock plan platform in the past year. Overall, satisfaction with their online resources were high, according to the survey: 78% said they strongly or somewhat agreed that they were satisfied with the overall website experience, 75% strongly or somewhat agreed it was easy to locate information, and 77% strongly or somewhat agreed that the information on the website was easy to understand. In addition, 77% somewhat or strongly agreed that it was easy to accomplish what they wanted to do on the website. Overall, these responses were a few points better than what was seen in 2021.
Respondents were also interested in educational content: 70% said they were likely or very likely to attend an education session on stock plan benefits. Other areas that drew strong interest were education sessions on retirement (68%), advanced investing (67%), and investing (60%).
“Educational content demand is strong and key to empowering employees,” the report said.
“The results of our survey show that the perceived value of stock plan benefits has increased, and employers are recognizing this. The next step is to arm employees with the information they need, to help them make more confident decisions and get the most out of their stock plan benefits.”