Key Considerations for ESPPs with Matching Shares

Employee stock purchase plans (ESPPs) continue to surge in popularity as companies look for cost-effective ways to include employees in their success. ESPPs come in many different flavors and we continue to see more companies offering lucrative plans to attract the best talent, such as those with lookbacks and resets.

In this issue brief, we dive into a particularly intriguing type of ESPP called a share-matching ESPP, where the shares an employee purchases are matched by the employer using a predefined ratio. We start with an overview of these plans followed by a discussion of the benefits to both companies and employees, then detail the accounting implications and other potential challenges.