4 Top Ways Workers Use Company Stock Plan Funds: Fidelity

Employee stock purchase plans are a workplace benefit that are easy to use and can help workers pay for planned and unplanned expenses.

However, as many as two-thirds of eligible employees do not participate in their ESPP, according to a survey released Monday by Fidelity Investments.

An ESPP gives rank-and-file workers an opportunity to apply part of their paycheck toward the purchase of company stock, often at a discounted price.

Fidelity wanted to know how employees spend the proceeds of company stock acquired through their ESPP. Did they use the proceeds for luxury items or for more practical purposes?

CMI conducted the survey conducted for Fidelity in March and April of 1,369 stock plan participants in the U.S. and 745 overseas participants.

Following are the main ways employee-participants reported using the money from the sale of stock acquired through their company’s ESPP:

1. 34% paid bills and addressed debt
2. 19% reinvested the proceeds from an ESPP sale: 10% invested in stocks or mutual funds, and 9% reinvested the proceeds in a retirement savings account
3. 17% used ESPP proceeds for home needs: 10% for home improvements and 7% to buy a new or second home
4. 11% put the money in an emergency fund

Fidelity noted that workers may be overlooking one use for the proceeds. Only 5% of those surveyed said they used the money for college expenses or student loans.