Employee Stock Purchase Plans & Options

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Employee stock purchase plans and options are used as part of compensation packages that allow employees and executives to share in the gains and losses of a company. Contact a tax attorney or the IRS to discuss the pros and cons of offering employee stock purchase plans with advice from a financial analyst in this free video on the stock market.

Part of the Video Series: Stock Market Tips & Facts
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Video Transcript

Do you own your own company? And would like to sell it? Hi, this is Roger Groh at Groh Asset Management. One of the ways that you may consider doing that transaction, is to sell that company to your current employees via employee stock ownership plans. As part of broad executive compensation packages, frequently stock options are given to corporate officers and employees. Why is that beneficial? Well they also share in any gains and share price, along with share holders. We always like that. Because it put the management teams on the same page as share holders. However, the tax incentives that came along with giving stock options, were deemed not desirable by Congress. And the Internal Revenue Service code was changed, to take away some of the incentives that came with stock options. It's really too bad, as that change may have caused much of the bank mess that we have seen today. With that in mind, on the specifics of whether or not stock options are right for you or your company, I suggest you contact your tax attorney or the IRS at irs.gov, and have a lengthy discussion about the pros and cons and strategies, associated with, with stock options. But in general, it's a way to reward your employees for their efforts. Hope that helps. I'm Roger Groh at Groh Asset, and thank you very much for spending time with me.


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