Schwab Stock Plan Services has rolled out new tools to help employees manage the company-stock component of their savings strategy.

The Stock Plan Services unit serves 124 corporate clients and 235,000 participants that hold about $30 billion in their employers’ stock. Incentive stock options, performance stock options and employee stock purchase plans are available through the platform. Employee Stock Ownership Plans are managed through Schwab’s Retirement Plan Services unit.

Now, participants can manage their stock options through an enhanced mobile application on their phone which will provide stock vesting details, track shares purchases and exercised or unexercised shares.

Marc McDonough, vice president of Schwab Stock Plan Services, says he sees companies of all shapes and sizes adopting incentivized stock plans to complement defined contribution plans. They are particularly popular with new and fast-growing companies in the Silicon Valley.

“Employers are embracing equity awards programs now more than ever before,” McDonough told BenefitsPro. “They are a powerful business tool that creates long-term value for employers and their workers."

Company stock

Interest in stock incentive plans is increasing. (Photo: iStock)

Growth in stock plans

Evidence of the dividends — employee retention, engagement and overall financial wellness — can be seen in programs Schwab’s manages, said McDonough.

“One of the most promising trends we’ve noticed is the increased interest in overall financial wellness and how equity compensation can be connected to people’s broader financial outcomes,” he said.

Last year, Fidelity Investments also reported record growth in its stock plan administrative unit, noting 53 new client agreements since the middle of 2014 that accounted for 140,000 new participants and nearly $11 billion worth of company stock.

Fidelity has also seen more interest in the option of issuing stock options from tech startup companies.

“Company stock plans are playing an increasingly important role in corporate benefit programs, especially as more companies expand their workforce globally and look for ways to enhance their benefits offering while streamlining the administration of their platform,” said Kevin Barry, executive vice president of Fidelity’s Stock Plan Services business.

The popularity of stock incentive programs skyrocketed during the dot com tech bubble of the late 1990s.

Privately held companies, of course, have to accurately value the price of shares before they issue them as incentive compensation and consider whether a stock incentive plan could complicate a potential sale of the company, according to a fact sheet from the Society for Human Resource Management.

There is also the risk the vested employees could leave if a company’s stock underperforms expectations, SHRM says.

Instant Insights /

Schwab: Interest in stock incentive programs greater than ever

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