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October 14, 2015 at 07:43 AM
Fidelity Investments has posted record sales in its stock plan administrative services unit.
Since July 1, 2014, the Boston-based investment company has inked 53 new client agreements representing more than 140,000 plan participants.
The deals add $10.8 billion to the stock services platform, and represent four straight years of record sales.
The platform provides the recordkeeping and trade execution for restricted stock plans, performance plans, stock options, and employee stock purchase plans.
Employee Stock Ownership Plans, or ESOPs, are not available through Fidelity’s stock administrative services, according to a company representative.
By some industry accounts, ESOPs are on the wane after a 2014 unanimous Supreme Court decision in Fifth Third Bancorp v. Dudenhoeffer, which said fiduciary sponsors can no longer rely on the “presumption of prudence” argument in so-called company stock-drop cases.
In the wake of that decision, a recent Towers Watson survey of 160 sponsors that offer company stock in 401(k) plans showed more than a quarter have already begun eliminating the option.
But the recent developments at Fidelity suggest many employers still value incentivizing workers with company stock, albeit through options that exist outside of 401(k) offerings.
