Top 10 financial-planning rules for employee stock purchase plans (ESPPs)
The big benefits of ESPPs
Multimedia educational content on ESPPs
Got a minute? myStockOptions launches engaging series of one-minute stock comp videos
NASPP 2021: myStockOptions an exhibitor, editor-in-chief a speaker
myStockOptions Learning Center: Convenient CE credits online


  • StockOpter: Professional Equity Compensation Analysis Software (see the ad below)

  • myStockOptions Webinars: From stock comp basics to advanced financial and tax planning, our webinars have something for everyone (see the ad below)

  • AdvisorFind Directory from Search this resource for financial, tax, and legal advisors with experience in stock compensation (see the ad below)

Editor's welcome

This issue of our quarterly newsletter showcases some of our award-winning content on employee stock purchase plans (ESPPs). Although our trusted brand name is myStockOptions, we could just as easily be myESPP, given our extensive and engaging articles, FAQs, videos, podcasts, and quizzes on ESPPs and the related financial planning.

myStockOptions Webinar Channel

Separate from, we now have the popular myStockOptions Webinar Channel, where you can register for our upcoming webinars and purchase past webinars on demand. Each on-demand webinar (100 mins) offers 2.0 CE credits for CFP, CPWA/CIMA, and CEP.

SAVE THE DATE: Our next webinar will be Rule 10b5-1 Trading Plans & Other SEC Rules Advisors Need To Know (Oct. 20, 2pm ET, 11am PT).
Keep Up With Equity Comp

The Blog is a great way to stay informed about new developments in equity compensation. You can also follow us on Twitter and Facebook. I also have a blog at

In addition, you can watch all of our lively short videos at the myStockOptions YouTube Channel.

—Bruce Brumberg (Editor-in-Chief)

Two FAQs on ESPPs

What are the top 10 financial-planning rules for employee stock purchase plans?

Before you participate in your company's employee stock purchase plan (ESPP), understand the following essential points for financial planning with ESPPs.

1. Set goals. Understand the value of your ESPP participation and how it fits into your life. What exactly do you want to do with the proceeds from the eventual sale of the shares? This consideration should include important life events and planning goals.

2. Know what type of ESPP you have. There are two types of ESPPs: tax-qualified and nonqualified. It is vital to know which you have.

3. Find out how purchase periods work, and understand the ESPP life-cycle. During a purchase period, payroll deductions are accumulated. The offering period and the purchase period can be the same length (e.g. six months), or the offering period can comprise two or more purchase periods. You should know the following: the maximum you can contribute (considering both your plan's rules and your available cash); whether you can increase or decrease your contribution amount during an offering; and how you can withdraw from the offering.

4. Understand purchase discounts and lookbacks. Your company will specify the discount before the offering begins. If your plan has a lookback feature, the discounted purchase price that you pay is based on the stock price at either the start or the end of the offering period, whichever is lower.

5. Learn the impact of job termination. If you leave the company, you will continue to own shares purchased during your employment, but your eligibility for participation in the plan ends.

6. Know the timeline of the ESPP holding periods. If your ESPP is tax-qualified, the tax consequences depend on whether you meet the holding periods required for favorable tax treatment. Also find out whether your company imposes its own mandatory holding period.

7. Understand ESPP taxation. Your tax treatment is determined by the length of the holding period after both the start of the offering and your purchase date. See related FAQs for examples of the tax treatment when the holding periods are met, when the holding periods are not met, and for nonqualified ESPPs. This also affects your tax-return reporting.

8. Decide whether you want to sell or hold the shares after purchase. Whether you hold the shares and for how long will affect your tax treatment when you sell them. Consider company trading blackouts and ownership or retention guidelines.

9. Watch tax rates in the year of sale. Anticipate what your tax rate will be in the year when you plan to sell ESPP shares. Yearly income above certain thresholds raises your rate of capital gains tax and triggers a Medicare surtax (see a related FAQ).

10. Beware of overconcentration in company stock. Consider sales of stock for healthy investment diversification.

To read a detailed discussion of all these topics, see the in-depth article on financial planning for ESPPs.

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StockOpter Redesigned to Simplify Equity Compensation Planning, the industry leading application for equity compensation valuation and risk analysis, has been completely redesigned and enhanced. The current version of StockOpter makes it easier than ever for advisors to analyze client company stock and option holdings and provide professional guidance.

Initially released in 2008, from Net Worth Strategies, Inc. enables financial advisors to attract clients that receive equity compensation and help them make timely and informed diversification decisions. Unlike general financial planning applications designed specifically for retirement planning, StockOpter proactively shows clients when, why and how they should diversify their employer stock and options. Consequently, StockOpter users report on average they generate over $500,000 in assets under management per client and/or can charge fees of $1,000 - $5,000 annually for equity compensation assistance. calculates equity compensation values and illustrates the risks. StockOpter's unique analytics include equity compensation forfeit value, leverage, exercise ratios, concentration and goal attainment (see video). These analytics plus intrinsic and after-tax values are included in brandable client reports and in interactive dashboards for modeling what-ifs. StockOpter helps determine stock price targets based on risk and sends email alerts for these and for upcoming vesting / expiration events. Additional enhancements planned for release in October 2021 include a full tax engine like Excel based StockOpter/Pro and multi-year strategy modeling capabilities.

Visit the demo to review a sample client case or contact Bill Dillhoefer for more information about using to attract and assist equity compensation recipients.

What are the benefits of participating in an employee stock purchase plan?

An employee stock purchase plan (ESPP) offers many benefits.

You Acquire Ownership In Your Company

By participating in an ESPP, you become an owner in your company, with all the financial upside and risks that any investment can bring. An article in San Antonio Express-News explains some of the benefits that ESPPs present for you and your company. As one store manager explains, an ESPP makes employees "enthusiastic" because they "feel like it's their company." As employers eliminate company stock as a 401(k) investment choice, they are are making ESPPs more attractive as an alternative way to acquire company shares.

Special Purchase Opportunity

Depending on the type of ESPP and its features, you may be able to purchase stock in the company at a discount from its fair market value. Alternatively, some companies have an open-market purchase plan, which offers no discount on the price but allows employees to purchase shares periodically without the usual brokerage fee.

Financial Advantages

A survey of ESPP participants by Fidelity Investments found that ESPPs can help to improve employees' financial well-being. A separate Fidelity survey shows how ESPP participants used funds from ESPP stock sales to improve financial wellness.

Schwab Stock Plan Services conducted a national survey of 1,000 stock plan participants. The survey found that 76% of the participants consider equity compensation, including ESPPs, to be part of their long-term financial plans, making them feel less financially stressed. The survey also found that it makes 63% feel more prepared for retirement.

An ESPP also lets you take advantage of something called dollar-cost averaging. In this concept, you invest the same amount of money to buy stock regularly through payroll deductions, regardless of the stock price, so you end up buying more shares when the price is down and fewer when the price is up. While dollar-cost averaging does not ensure a profit or shield you from a loss, people who use dollar-cost averaging generally tend to pay less per share over time than those who purchase shares all at once.

See related FAQs for details about Section 423 tax-qualified ESPPs and examples of why they are an especially great deal.

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myStockOptions Webinars

See the myStockOptions Webinar Channel for upcoming webinars and past webinars on demand. Each on-demand webinar (100 mins) offers 2.0 CE credits for CFP, CPWA/CIMA, and CEP:

Restricted Stock & RSU Financial Planning: Advanced Bootcamp: Insights from a panel of three leading financial advisors, including case studies, to provide practical expertise for restricted stock/RSUs in public and private companies.

"Strong technical knowledge, great personalities kept me engaged, and the ability to relate to client cases gave me actionable advice I needed."

Stock Option Exercise Strategies: Advanced Bootcamp: It is crucial to have a plan for stock option exercises. This webinar features compelling strategies from a panel of three experts in financial and tax planning for option exercises.

Stock Compensation Bootcamp For Financial Advisors: Whether you are new to stock comp or want to sharpen your knowledge, our bootcamp webinar provides practical information and insights to maximize success.

Stock Comp Financial Planning For Private Company Employees: From Startup To IPO Or Acquisition: Equity comp in private companies is different. Learn the related financial and tax planning with three leading financial advisors, including real-world case studies.

Strategies For Concentrated Positions In Company Stock: Wealth is won and lost through the management of concentrated company stock positions. In this webinar, experts at managing concentrated stock wealth explain strategies and solutions.

Multimedia educational content on ESPPs

Below we list articles, videos, podcasts, and interactive quizzes about ESPPs in the award-winning multimedia content of

The extensive section on ESPPs at is complemented by a self-study course and exam for CFP, CPWA/CIMA, and CEP continuing-education credits.

All of the content and tools of myStockOptions are available by individual Premium Membership (bulk memberships at discounted rates available), by individual Pro Membership for financial advisors, or by corporate licensing.


Six ESPP Essentials, by the myStockOptions editorial team
This two-part article series explains important ESPP aspects and concepts in plain English. Part 1 discusses the basics of ESPP participation, such as enrollment rules, plan types, and offering/purchase periods. Part 2 covers holding periods, tax rules, and the impact of various events, both personal (e.g. job loss) and corporate (e.g. M&A).

ESPPs 101: Key Dates And Terms You Must Know, by the myStockOptions editorial team
Your employee stock purchase plan (ESPP) may be one of the best benefits your company offers. However, to maximize its value, you must know its key dates and terms. This article explains the basics you need to know for your ESPP participation.

ESPPs 101: Taxation Made Simple, by the myStockOptions editorial team
To make the most of your company's ESPP, you must understand the tax consequences of participation. This two-part article series explains the basics of ESPP taxation.

How Employee Stock Purchase Plans Offer Special Benefits In Down And Volatile Markets , by the myStockOptions editorial team
One good thing about employee stock purchase plans (ESPPs) is they can't be "underwater" like stock options. In fact, an ESPP with a discount and a lookback can be a good deal even in down markets. This article explains the unique shelter from volatile and falling stock prices that ESPPs offer.

Fundamentals Of Employee Stock Purchase Plans, by Alisa Baker
Your company's employee stock purchase plan (ESPP) may be one of your best employee benefits. However, to maximize the value of your ESPP, you need to understand how it works. This four-part series covers all aspects of ESPPs, from the basic to the complex. Part 1 is free to all registered users of the site.

The Great Benefits Of Your Company's Employee Stock Purchase Plan, by Sandra Sussman
Strangely, many employees don't take advantage of their companies' employee stock purchase plans. This article will show you exactly why ESPPs are a good deal.

Ten Financial-Planning Rules Every ESPP Participant Should Know, by the myStockOptions editorial team
Employee stock purchase plans (ESPPs) are a super deal. However, the related taxation and financial planning can be deceptively complex. This article presents the essential points that you should understand before you participate in your company's ESPP.

ESPP Contribution Limits And Why They Matter To You, by Bruce Brumberg
If you are enrolled in a tax-qualified employee stock purchase plan, the amount of company stock that you are allowed to purchase is limited. You will want to keep this in mind when you allocate part of your salary to your ESPP. Read this article to understand how the contribution limits affect your ESPP planning.

IRS Form 3922 For ESPPs: What You Need To Know, And How It Can Help You Understand ESPP Taxation, by Bruce Brumberg
Stock purchases made through an ESPP during a calendar year are reported to you and the IRS on Form 3922 early in the following year. This article explains what you need to know about the information on the form, and how the form can help you better understand the complexities of ESPP taxation.

Employee Stock Purchase Plans And Your Financial Planning, by Bruce Brumberg
ESPPs are popular and prevalent at most public companies. However, the structure of these plans is changing. As this two-part article series shows, these modifications may affect your decision to participate in your ESPP and its place in your financial planning.

ESPP Choices: Flip Or Hold?, by Timothy Farmer and Gregory Geisler
After you decide to participate in your company's ESPP, you must choose whether to sell the stock soon after purchase or to hold it (and for how long). This two-part article series examines different ways to participate in your ESPP according to relative risk tolerance, timeframe, and needs for money.


Employee Stock Purchase Plans (ESPPs): Core Concepts & Benefits
Running time: 3:35. Bruce Brumberg, the editor-in-chief of, clearly explains both the fundamentals of employee stock purchase plans (ESPPs) and the benefits that ESPPs can provide. Using animated examples, this video covers key ESPP concepts, including the offering period, the purchase date, lookbacks, and discounts.

Employee Stock Purchase Plans (ESPPs): Key Rules & Decisions
Running time: 2:53. Bruce Brumberg, the editor-in-chief of, clearly explains the important rules you must know and the key choices you will have to make when you participate in an employee stock purchase plan (ESPP). Topics include ESPP features and the related basic financial-planning concepts.

Employee Stock Purchase Plans (ESPPs): Taxes
Running time: 4:24. Bruce Brumberg, the editor-in-chief of, clearly explains the five key tax rules you must know when you participate in an employee stock purchase plan (ESPP). Illustrated by animated examples, the covered concepts include the special rules that depend on how long you hold the shares.

NEW! ESPPs: 5 Things You Need To Know
Running time: 1 minute. An employee stock purchase plan (ESPP) is a great benefit and income booster that also lets you become a shareholder in your company. In just 60 seconds at our popular YouTube channel, the editor-in-chief of myStockOptions explains the top five things you need to know to make the most of your ESPP participation.


Podcast! Basics Of ESPPs, by Bruce Brumberg
In this eight-minute podcast, the editor-in-chief of explains how ESPPs work, including enrollment, offering periods, lookbacks, purchase, and taxation.


Employee Stock Purchase Plans: Qualified And Nonqualified Plans, by Bruce Brumberg
Bruce Brumberg, editor-in-chief of, developed this presentation for talks and meetings on the basics of employee stock purchase plans. Covered topics include types of ESPP, the ESPP tax treatment, and survey data on the use of ESPPs by companies. (Premium members may request permission to use the PowerPoint version at their companies.)


Learning Center: Course on Employee Stock Purchase Plans for CE Credit
This course and exam, offering continuing education credits for CFPs, CEPs, CWPAs, CIMAs and other professional designations, weaves all of our key articles, FAQs, podcasts, and videos on ESPPs into a dynamic, interactive learning tool.

You can also test your smarts with our free interactive quiz on ESPPs In addition to being fun, the quiz is also a course of study. The answer key links to content on the topic for followup reading.

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AdvisorFind Directory
Find a financial, tax, or legal advisor with experience in stock compensation

Stock compensation raises many questions.

  • How much should you contribute to your ESPP?
  • When should you exercise stock options?
  • Should you sell or hold restricted stock at vesting?
  • How can you diversify your company stock holdings?
  • How can you minimize your tax bill?
  • How do you negotiate for stock compensation in your employment agreement?

While is a good place to learn about concepts, issues, and general strategies in equity compensation, at some point you may need an advisor to help with your unique situation. Yet finding a good advisor can be hard when you are busy and don't know where to start. The AdvisorFind Directory from is for you.

  • Identify and contact an expert who can provide specialized professional guidance on equity compensation.
  • Search for advisors by geographical area, type of advisor, years of experience, minimum portfolio size, and other key criteria.
  • Look up resources for performing background checks on advisors.

Searching AdvisorFind is free and does not require registration at

Got a minute? myStockOptions launches engaging series of one-minute stock comp videos

Inspired by the demand for video educational content on stock comp, and the populariy of short-form videos such as those on TikTok, has launched a series of one-minute videos on equity comp topics at its YouTube channel ( The videos are also embedded into related articles and FAQs at myStockOptions. In each video, editor-in-chief Bruce Brumberg runs through 5 things you need to know about the video topic in about 60 seconds.

Watch our one-minute video on employee stock purchase plans here:

Visit our YouTube channel for many more of our popular videos.

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myStockOptions editor-in-chief to speak at NASPP 2021 conference: what your employees really want to know about stock comp and how to "coach" them through it

Coming up on October 25-28, the annual conference of the National Association of Stock Plan Professionals (NASPP) will once again be "virtual" instead of in-person. As it has at every NASPP conference, whether live or online, will be an exhibitor at this year's event.

Want to hear some creative ideas for improving your company's stock plan education and communications? myStockOptions editor-in-chief Bruce Brumberg will give a 30-minute "Power Talk" on Oct. 25: What Employees Really Want to Know About Equity: A Coaching Approach To Improve Employee Education & Communications (2pm ET, 11am PT). Bruce is also a high-school tennis coach and will explain in a creative and entertaining way how tennis-coaching methods can apply to boost employee stock plan education.

For this and the many other valuable offerings at NASPP 2021, see the conference agenda.

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myStockOptions Learning Center offers convenient continuing education (CE) credits

Including our popular course on ESPPs, the Learning Center has 7 self-study courses and exams that offer continuing professional education:

  • 35 CE credits for Certified Equity Professionals (over 100% of the total requirement)

  • 21 CE credits for Certified Financial Planners (70% of the total requirement)

  • 21 CE credits for CPWAs and CIMAs (52.5% of the total requirement)

  • Potential self-reportable CPE for Certified Public Accountants (CPAs) and CE for CFA Charterholders (see the Learning Center for information)

Each course of study features podcasts, articles, and FAQs from They are woven into a dynamic, interactive learning tool that teaches the topics in a memorable way. The answer key for each exam also links to relevant content on the site for further reading and learning.

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