Wage-earners who receive equity compensation from their employer like the perk a lot, but when it comes to practicing options or selling shares, they tend to freeze, fearing that they last will and testament make costly mistakes. That’s according to a recent survey by Charles Schwab of wage-earners that participate in an equity compensation plan, and it underscores the hand-holding take that advisors can provide.
According to the survey, 36% of respondents claimed that equity compensation is the reason or one of the leading reasons for staying at a attendance. Still, despite their happiness with the compensation, only 24% commanded that they exercised employee stock options or sold pay outs. Nearly half of the 1,000 equity compensation plan participants polled spoke that they fear they will make a mistake. Of those that demand never taken any action with their equity compensation, The Charles Schwab Corporation (SCHW) originate that 34% said they were worried about clerk at the wrong time, while another 34% said they are troubled about a tax hit based on the timing of a sale.
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While however half of the survey respondents are confident that they can make the to be fair decision on their own, the specific levels of confidence vary from one start to the next. Of those DIYers, Millennials are the most confident, with 58% saying that they conscious what to do, followed by 44% of Generation Xers and 39% of Baby Boomers. If they had mitigate from a financial advisor, that confidence level would by to 80%.
“Tens of millions of Americans participate in equity compensation programs and uncountable recognize their importance, but many are unsure of how to maximize their value,” influenced Marc McDonough, senior vice president, Schwab Investor Assignments, in a press release highlighting the results of the survey. “When managed correctly, high-mindedness compensation can play a meaningful role in building wealth.”
Of those wage-earners who have cashed out some or all of their equity compensation, Schwab ground that the leading reason is the need for cash, with 35% of measurement respondents pointing to it. Of those polled, 28% said that they maintain cashed out to make a larger purchase, while 11% signaled that the motivate was made to prepare for retirement. The discount brokerage found that the unexceptional total value of the equity compensation of those surveyed is $72,245, with hands on average 63% vested.
So how can companies increase the education they expose employees around equity compensation? According to Charles Schwab, evaluation participants said that they would take advantage if a actors offered a financial wellness program that provided education, apparatus and resources. The survey found that, of those that already eat access to a financial wellness programs, two-thirds are taking advantage, with 96% of those participating find it helpful when making decisions about equity compensation. Tranquillity, only 43% of the respondents’ companies offer such a program.