Many companies offer stock-based compensation such as stock options, restricted stock units, and employee stock purchase plans to attract and reward employees. However, some employees don't fully understand these benefits and may miss out on the potential wealth-building opportunities they provide. It's important to research and consider the pros and cons of each type of compensation carefully to make informed financial decisions.
Employee stock purchase plans (ESPPs) allow employees to buy discounted company shares through payroll deductions. While they can be beneficial, it's crucial to understand the rules and risks before opting in. Consider factors like tax treatment, contribution limits, and market performance. Some ESPPs offer significant discounts and flexible purchase options, while others may have stricter rules. It's essential to carefully review the plan documents and weigh the pros and cons before making a decision.
