BenefitsLink logo
EmployeeBenefitsJobs logo
Free Daily News and Jobs

“BenefitsLink continues to be the most valuable resource we have at the firm.”
-- An attorney subscriber
Featured Jobs

Client Services Representative (Miami FL / Telecommute)

Retirement Plan Administrator (Santa Ana CA)

Sales - 401(k) / DB (FL / GA / IL / MN / MO / NC / TN / WI)
Get the BenefitsLink app LinkedIn

News Items, by Subject

Stock plans - employee stock purchase (423)

View Headlines Now Viewing Excerpts and

[Guidance Overview] IRS Allows Flexibility in Purchase of Employer Shares by Stock Purchase Plan Participants
"The IRS concluded [in Private Letter Ruling 201911002] that a participant's ability to obtain a loan from its employer or a third party to purchase shares under a plan does not prevent the plan from qualifying as an employee stock purchase plan under Section 423(b). The IRS further concluded that the inability of a participant to obtain a loan to purchase shares due to the applicability of the Sarbanes-Oxley Act does not cause some options under the plan to have different 'rights and privileges' in violation of Section 423(b)(5)." (Morgan Lewis)
[Official Guidance] Text of PLR 201911002: Loan Program to Facilitate Purchase of Shares Under 423(b) Employee Stock Purchase Plan (PDF)
"Taxpayer expects to adopt ... an employee stock purchase plan under section 423(b) of the Code [under which] a Plan participant may purchase Taxpayer shares at the end of the offering period for an amount equal to 85% of the fair market value of the Taxpayer stock ... The exercise price will be paid through salary reduction amounts and/or the proceeds of a loan from Taxpayer or a Third Party, unrelated to Taxpayer.... Taxpayer is requesting a ruling that offering the Loan (on the conditions described above) to Plan participants will not prevent the Plan from meeting the requirements under section 423(b)[.]" (Internal Revenue Service [IRS])
[Guidance Overview] Reminder: Employers Must Report 2018 ISO and ESPP Transactions
"Corporations that offer incentive stock options (ISOs) or maintain a tax-qualified employee stock purchase plan (ESPP) have an obligation to file returns with the IRS and to deliver information statements to employees and former employees regarding the acquisition of shares under such arrangements.... These forms are due regardless of any partial shutdown of the Federal government." (Latham & Watkins)
Employee Stock Purchase Plans: The Biggest Tax-Return Mistakes to Avoid
"[1] Not filing Form 8949 after an immediate sale of ESPP shares at purchase.... [2] Paying tax on the discount too early.... [3] Directly using what appears as the cost basis on your Form 1099-B.... [4] Paying the wrong tax on the discount.... [5] Using the wrong price when there is no lookback." (
Employees Are Changing the Way They Acquire Company Stock
"A growing number of U.S. workers are taking advantage of their ESPP to purchase company stock, with the percentage of employees participating in their ESPP increasing to 28 percent in 2016, up from 23 percent in 2014.... The percentage of employees with company stock in their 401(k) has dropped by almost half, from 41 percent in 2005 to 23 percent in 2016. More than one in four employers (28 percent) still offered company stock through their 401(k) in 2016, dropping from 39 percent in 2005. Nine percent of employee 401(k) assets were in company stock in 2016, down from 16 percent in 2005." (Fidelity)
[Official Guidance] IRS Publication 1220: Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G for Tax Year 2017 (PDF)
150 pages, August 2017 revision date. Includes a "First Time Filers Quick Reference Guide" with information about Form 4419, Application for Filing Information Returns Electronically (FIRE), which is used to request authorization to file Forms 1097, 1098 Series, 1099 Series, 3921, 3922, 5498 Series, 8027, 8955-SSA, 1042-S, and W-2G electronically through the Filing Information Returns Electronically (FIRE) System. Excerpt: "Allow a 45-day processing timeframe prior to the earliest information return due date." (Internal Revenue Service [IRS])
Tax Reporting for Stock Compensation: Understanding Form W-2, Form 3922, and Form 3921
"Making sense of Form W-2 when stock compensation is reported ... Form 3922 for ESPPs and Form 3921 for ISOs ... Sell shares in 2016? The fun is just beginning." (
Employee Stock Plans: 2016 Year-End International Reporting Requirements
"This White Paper highlights some of the principal calendar and year-end reporting requirements for employee stock plans that U.S. companies most commonly encounter when offering these programs to their employees in selected jurisdictions worldwide.... A chart summarizing these items [is included]." (Jones Day)
Nearly Half of Employees Used Company Stock to Help with Personal Finances and Increase Financial Well-Being
"Forty-eight percent of employees who purchased company stock through an ESPP sold all their shares within two years ... [O]nly six percent of employees that sold all of their shares did so within 10 days of purchasing the shares.... [E]mployees in ESPPs that offer a higher discount are more likely to sell sooner -- almost 40 percent of employees with a 15 percent discount sold all their shares within 90 days, compared to 25 percent of employees in plans with a five percent discount. However, higher discounts contribute to higher employee participation rates." (Fidelity)
[Guidance Overview] Annual ISO and ESPP Information and Reporting Requirements
"Participant statements may be provided on Form 3921 (for ISOs) and Form 3922 (for ESPPs) or may be provided using a different format that complies with the substitute form requirements found in IRS Publication 1179.... [C]ompanies with a limited number of transactions will likely use Forms 3921 and/or 3922 (as opposed to substitute statements) since these forms will need to be prepared and submitted to the IRS in any event.... [C]ompanies that provide Form 3921 and/or 3922 to participants (again, as opposed to providing substitute statements) will deliver the form(s) to their participants, along with a cover letter explaining the statement in a manner similar to this statement for ISO transactions and this statement for ESPP transactions." (Orrick)
[Guidance Overview] 2016 Deadlines Approach to Furnish Incentive Stock Option and Employee Stock Purchase Plan Information Statements and Returns
"Section 6039 of the Internal Revenue Code requires a corporation to furnish a written statement to any employee or former employee who either [1] exercised an incentive stock option within the meaning of Section 422 of the Code (ISO) during 2015 or [2] during 2015 first transferred legal title to shares acquired under the corporation's employee stock purchase plan.... The corporation must furnish these statements on Forms 3921 and 3922 no later than February 1, 2016.... [C]orporations must [also] file returns with the Internal Revenue Service on Forms 3921 and 3922 no later than February 29, 2016, if filed on paper, or March 31, 2016, if filed electronically." (DLA Piper)
[Guidance Overview] Understanding Form W-2 When It Includes Income from Stock Compensation
"The vesting of restricted stock, the share delivery from restricted stock units (RSUs), and the vesting of performance shares all prompt W-2 reporting of the income received. The treatment on the W-2 is essentially the same for all three grant types.... With incentive stock options, the spread value appears on the W-2 only when you make what is technically called a disqualifying disposition, i.e. when you sell or gift the stock before you have met the required holding periods of one year from exercise and two years from grant. In that case, the income appears on the W-2 as compensation income.... If you sold shares from stock compensation or an ESPP last year, you'll need guidance to report the sale proceeds on your tax return." (
Stock Plan Education Shows Improvement But Can Do Better
"Many participants are adequately familiar with their stock plans' features but are unsure about how and when to take action with their grants. Slightly more than half of the survey respondents say they have a good sense of the relationship between company stock price and the value of equity compensation, and that is good -- but it also implies that nearly half of the respondents do not understand even this basic concept." (
FASB Commences Project to Improve and Simplify Accounting for Stock Compensation Under ASC Topic 718 (PDF)
2 pages. "On October 8, 2014 [FASB] added to its agenda a narrow-scope project to improve and simplify accounting for stock compensation under FASB Accounting Standards Codification (ASC) Topic 718. The project is intended to focus on the following six areas: [1] Minimum statutory withholding requirements; [2] Presentation of stock-for-tax withholding transactions on the statement of cash flows; [3] Accounting for forfeitures; [4] Accounting for excess tax benefits and deficiencies; [5] Presentation of excess tax benefits on the statement of cash flows; [and] [6] Simplifications and practical expedients for nonpublic companies[.]" (Frederic W. Cook & Co., Inc.)
Glass Lewis Releases 2015 Policy Guidelines
"The firm has added an area of focus in its discussion on the say-on-pay analysis: The implementation and effectiveness of the company's executive compensation programs including pay mix and use of performance metrics in determining pay levels ... The firm does not believe one-off awards are generally in shareholders' best interest ... Glass Lewis is generally in favor of ESPPs and in most cases will support plans up to a purchase limit of $25,000 per employee per year[.]" (Steven Hall & Partners)
Navigating Company Stock Regs with 10b5-1 Executive Trading Plans: Best Practices (PDF)
"Competitive equity compensation is essential for companies looking to attract, reward and retain top executives. To ensure executives' interests are aligned with the shareholders', packages frequently include complex performance awards. Maximizing the value of those equity awards plays a critical role in executives' ability to build wealth and achieve their financial goals. But managing equity programs can be complicated for employers and executives ... [M]ore than 70% of companies cited compliance factors as the biggest challenge in offering equity awards." (Bank of America Merrill Lynch)
[Guidance Overview] IRS Rev. Rul. 2014-9 Offers Rollover Due Diligence Safe Harbor (PDF)
"Although the requirement to offer a rollover does not require transferring funds to defined benefit plans, such plans are not precluded from accepting rollovers, as IRS clarified in its regulations. Indeed, recent guidance from IRS and PBGC affirms the ability to make such rollovers and explains how various qualification and benefit guarantee rules operate for them." (Buck Consultants)
Deadlines Approaching for Employer Return Requirements for ISOs and Employee Stock Purchase Plans
"A corporation (including private and public corporations) may be subject to penalties if it fails to furnish the applicable form in a timely manner, fails to include all the required information, or includes incorrect information in the form. The corporation has an obligation to file the applicable form with the IRS and distribute the applicable form to the relevant employee and will be liable for penalties with respect to each failure to file or provide the form." (Proskauer Rose LLP)
Annual ISO and Employee Stock Purchase Plan Information and Reporting Requirements
"Participant information statements may either be delivered or mailed to the participant's last known address or, if the participant has given his or her consent to receive the statement electronically, provided in electronic format. The consent to receive the statement electronically must be made in a way that demonstrates that the participant can access the statement in the electronic format in which the statement will be provided." (Orrick)
Incentive Stock Options and Employee Stock Purchase Plans: IRS Information Statements and Information Returns Under Section 6039
"[E]very corporation that in 2013 records ... the first transfer by an employee or former employee of stock acquired by such employee under an employee stock purchase plan (meaning a plan that is established under Section 423 of the Code, if the purchase price is either less than one hundred percent of the value of the stock on the grant date or is not fixed or determinable on the grant date) must, on or before January 31, 2014, furnish to the employee (or former employee) transferring the stock a written statement containing the information contained on Form 3922." (Cooley LLP)
Deadline Approaches for Reporting Incentive Stock Option Exercises and Employee Stock Purchase Plan Transfers that Occurred in 2013
"For ISO grants and ESPP transfers that occurred in 2013, the required information statements must be provided to employees and former employees no later than January 31, 2014. In addition, employers must file a corresponding return with the Internal Revenue Service (IRS) by February 28, 2014 for paper filings and March 31, 2014 for electronic filings." (Snell & Wilmer L.L.P.)
2013 Executive Stock Ownership Guidelines Report (PDF)
"The prevalence of Fortune 100 companies with publicly disclosed executive stock ownership policies increased from 86.3% in 2011 to 89.4% in 2012.... Between 2010 and 2012, the number of companies that used both ownership guidelines and holding requirements as their share retention method increased by 6.0%.... Ownership guidelines that define ownership targets as a multiple of base salary are the most prevalent guideline design.... Among companies with ownership guidelines, only 11.4% include options in determining ownership guideline compliance, compared with 43.0% that explicitly exclude options." (Frederic W. Cook & Co., Inc.)
Annual Reminder: Do You Need to Seek Shareholder Approval of your Stock Incentive Plan in 2014?
"[U]nder Code Section 162(m), if the Compensation Committee has the authority to change performance goal targets under the Corporation's stock incentive plan from year to year after shareholder approval of the goals, then the material terms of the performance goal must be disclosed to and reapproved by shareholders every five years.... ESPPs do not need to be reapproved by shareholders every five years for Code Section 162(m) purposes, but they can run out of authorized and registered shares." (Winston & Strawn LLP)
Employees Love Equity Awards But Corporate Stock Plan Education Could Be Better
"[A]significant majority of the participants (65%) either have skilled professional or technical roles or work in middle or low-level management.... One interesting line of inquiry gauged the perceived value of stock plans to that of other benefits, especially 401(k) plans. In this comparison, every grant type [but one] proved to be more popular than other company benefits[.]" (
[Guidance Overview] Annual Proxy Considerations in Executive Compensation (PDF)
"Preparing to file of an annual proxy statement raises many questions for HR teams, executives, and directors, particularly compensation committee members. As a concise summary, this chart addresses some of the more common and significant questions raised in this process for a larger NYSE- or NASDAQ-listed company." (Steven Hall & Partners)
[Official Guidance] Instructions for IRS Form 3921 (Rev. Aug. 2013) for Reporting of Excercise of an Incentive Stock Option Under Section 422(b)
"Every corporation which in any calendar year transfers to any person a share of stock pursuant to that person's exercise of an incentive stock option described in section 422(b) must, for that calendar year, file Form 3921 for each transfer made during that year." (Internal Revenue Service [IRS])
New Survey and Research Show the Persistence and Importance of Employee Stock Purchase Plans
"[O]ver half of the surveyed companies (51%) plan to modify their ESPPs in the next few years, and that 31% will make their plans more attractive for participants by, for example, increasing the purchase-price discount or adding a lookback provision.... [A]mong the surveyed ESPP companies, the percentage with a 15% discount on the purchase price fell from 87% in 2004 to 71% in 2011, while the percentage with lookbacks dropped from 82% in 2004 to 62% in 2011." (
Job-Based Health Coverage and the ACA: Why the Law Won't Cause Employers to Drop Coverage (PDF)
"Ninety-eight percent of businesses with 200 or more workers and 94 percent of businesses with 50 to 199 workers offered insurance to their employees in 2012. Employers have overwhelmingly said that they are unlikely to change their policy of offering coverage for their employees under the [ACA]. A recent study found that 82 percent of employers with 100 to 199 workers and 95 percent of employers with 1,000 to 2,499 workers do not anticipate dropping health insurance in the next one to three years." (Families USA)
Federal Indictment Alleges Detroit Pension Fund Trustee Pocketed Basket of Cash and Trips
"For 30 years, attorney Ronald Zajac watched over Detroit's billion-dollar pension funds.... According to the 13-count superseding indictment, Stewart accepted thousands of dollars in cash, trips, entertainment and other items of value from people seeking investments from the Police and Fire Retirement System." (Detroit Free Press)
Statements Due Very Soon to Participants Who Exercised Incentive Stock Options in 2012 or Transferred Shares Acquired under an Employee Stock Purchase Plan in 2012
"The January 31, 2013, deadline is approaching for an employer to provide statements to employees or former employees who exercised incentive stock options in 2012 or who first transferred legal title to shares acquired under an employee stock purchase plan with an option price between 85 percent and 100 percent of fair market value of the stock. In addition, the employer must file IRS Forms 3921 and 3922 with the IRS by February 28, 2013." (Haynes and Boone, LLP)
January 31 Deadline Nears for New IRS Form 3921 on 2012 ISO and ESPP Purchases
"[E]mployers must report incentive stock option (ISO) and employee stock purchase plan (ESPP) purchases for 2012 by January 31, 2013. This was a new requirement for 2010 purchases, and may have caught some employers by surprise since the IRS had delayed implementation for many years previously. Hopefully by now employers have worked the forms into their January payroll reporting routines." (Holland & Hart)
[Guidance Overview] Year-End International Reporting Requirements for Employee Stock Plans
"This Commentary highlights some of the principal calendar and year-end reporting requirements for employee stock plans that U.S. companies most commonly encounter when offering these programs to their employees in selected jurisdictions worldwide. A chart summarizing these items [is included]." (Jones Day)
IRS Contends Altera Corp. Wrongly Booked Employee Stock-Based Compensation Attributable to Offshore Unit
"The IRS, seeking $27 million in tax payments, contends that from 2004 through 2007 Altera wrongly booked expenses for employee stock-based compensation in the United States where the expenses were tax deductible, according to court records. The agency says Altera should split its employee costs between its U.S. parent and its Cayman Islands unit. Under this treatment, Altera would lose the U.S. tax deductibility of employee costs allocated to the Caymans." (Employee Benefit News)
Employee Ownership Update for May 15, 2012
NCEO Executive Director Loren Rodgers discusses the appointment of 22 new employee ownership research fellows at Rutgers, the Employee Ownership 100 update, employees voting against executive pay, a creative approach to stock purchase plans, and multinationals setting up employee ownership plans in Zimbabwe. (National Center for Employee Ownership)
Employee Ownership Update for April 2, 2012
NCEO Executive Director Loren Rodgers discusses new initiatives from the Mondragon Cooperative Corporation, the Secretary of Labor"s comments on re-proposing the DOL's fiduciary rule, UK proposals on options and employee ownership, Deloitte's global share plan survey, low awareness of company facts among U.S. workers, and new employee ownership fellowships at Rutgers. (National Center for Employee Ownership)
The New ESOP Executive Compensation and Private Company Equity Compensation Surveys
For ESOP companies and private companies with equity plans, relevant, affordable compensation data is often difficult to find, and it may be available only for particular industries. Such industry surveys may not address the unique issues that employee ownership companies face. The NCEO 2011 surveys of executive compensation in ESOP companies and of equity compensation in private companies fill this gap. This issue brief summarizes the results, including illustrative graphs and tables. (National Center for Employee Ownership)
Ensure your Plan Participants are Prepared for a Secure Retirement
Defined Contribution Conference, March 11-13, in Miami. Learn from your peers through presentations and discussions on plan design, communications, investment options and more. FREE registration for qualified plan sponsors. (Pensions & Investments)
New Edition of the Stock Options Book
The NCEO has just released the 13th edition of The Stock Options Book. This detailed reference has been fully updated throughout and covers the latest developments in equity compensation, including the Dodd-Frank Act and Section 6039 reporting. (National Center for Employee Ownership (NCEO))
New Edition of Selected Issues in Equity Compensation
The NCEO has just released the ninth edition of Selected Issues in Equity Compensation, which discusses issues such as securities laws, IPOs, handing death and divorce, and more. The book has been revised for 2012 and features a new, updated chapter on repricing underwater options. (National Center for Employee Ownership (NCEO))
New Edition of Accounting for Equity Compensation
The NCEO has just released the ninth edition of Accounting for Equity Compensation, which has been updated for 2012. Written in plain English for non-accountants, this book is a survival guide for understanding the impact of stock compensation on corporate financial statements. (National Center for Employee Ownership (NCEO))
New Edition of Equity Alternatives: Restricted Stock, Performance Awards, Phantom Stock, Stock Appreciation Rights, and More
The NCEO has just released the 10th edition of Equity Alternatives: Restricted Stock, Performance Awards, Phantom Stock, SARs, and More (formerly titled Beyond Stock Options). The book has been updated for 2012 and combines a detailed discussion of each plan type with sample plans (included on the accompanying CD). (National Center for Employee Ownership (NCEO))
New Edition of Securities Sources for Equity Compensation
The NCEO has just released the 2012 edition of Securities Sources for Equity Compensation, which collects relevant source documents for the study of equity compensation. (National Center for Employee Ownership (NCEO))
Should Employees Own More Company Stock or Less?
"In the Society for Human Resource Management's Employee Benefits Survey, for instance, only 10% of companies report having stock-purchase plans (which give staffers the opportunity to buy equity in the firm, usually at a significant discount like 15%). That's down almost half from 2008, when 19% of companies did so. And according to human resource consulting firm Aon Hewitt, 36% of employers offer company stock on the investment menu of their retirement plans, down from 47% just two years ago." (Employee Benefit News)
2011 Data on ESOP Executive Compensation (Employee Ownership Report excerpt)
The featured excerpt from the March-April 2012 Employee Ownership Report summarizes the results of the NCEO's 2011 ESOP Executive Compensation Survey. (National Center for Employee Ownership)
Employee Ownership Update for February 1, 2012
NCEO Executive Director Loren Rodgers discusses employee ownership in the 2010 General Social Survey, the continuing importance of ESPPs, Principal's 10 Best Companies for Employee Financial Security, employee ownership and charity, the April Employee Ownership Conference, and a different way of owning 'stock." (National Center for Employee Ownership)
New book on ESPPs (employee stock purchase plans)
The Certified Equity Professional Institute just released a new book on employee stock purchase plans (ESPPs) as part of its GPS (guidance, procedures, systems) series, and you can order a copy from the NCEO. (National Center for Employee Ownership (NCEO))
[Guidance Overview] Reminder of ISO and ESPP Reporting Deadlines
"This is a reminder to companies issuing incentive stock options and sponsoring employee stock purchase plans about the January 31 deadline to report certain information to participants and the February 28 deadline to file returns with the IRS." (McKenna Long & Aldridge LLP)
The State of Broad-Based Employee Ownership Plans 2012
This report details the extent and growth of employee ownership through ESOPs, 401(k) plans, stock options, ESPPs, and other vehicles; summarizes the leading research on employee ownership and corporate performance; and discusses current challenges and prospects. (National Center for Employee Ownership)
[Guidance Overview] Annual Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plans
"With respect to reporting ESPP transactions, companies are required to report the first transfer of legal title to any share purchased under an ESPP plan." (Orrick, Herrington & Sutcliffe LLP)
[Guidance Overview] 2012 Deadlines Approach to Furnish Incentive Stock Option and Employee Stock Purchase Plan Information Statements and Returns
"In addition to the employee information statements, corporations must file returns with the Internal Revenue Service on Forms 3921 and 3922 no later than February 28, 2012, if filed on paper, or April 2, 2012, if filed electronically." (DLA Piper)
[Guidance Overview] Tax Reporting Deadline Rapidly Approaching for Incentive Stock Options and Employee Stock Purchase Rights
"While these filings are required only once per year, please note that each Form 3921/3922 may report only one transaction. As a result, employers may need to prepare multiple forms for a single employee." (Jones Day)
[Guidance Overview] Incentive Stock Options and Employee Stock Purchase Plans: IRS Information Statements and Information Returns under Section 6039
"For incentive stock option exercises and transfers of stock acquired under employee stock purchase plans in 2011, the employer must furnish employee information statements no later than January 31, 2012 and must file information returns with the IRS no later than February 28, 2012 (or March 31, 2012 if filing electronically)." (Cooley LLP)
Employee Ownership Update for January 2, 2012
NCEO Executive Director Loren Rodgers discusses Berkshire Hathaway's purchase of an employee-owned newspaper, stock options in India, a new ESPP reference, the NCEO's executive compensation survey, spreading the word on employee ownership, and NCEO board elections. (National Center for Employee Ownership)
Updated List of Employee Ownership Plans in Major Public Companies
This list, updated and released in December 2011, shows which of the 900 largest publicly traded companies (the S&P 500 and the S&P mid-cap 400) have various forms of employee ownership, including stock options, stock purchase plans, ESOPs, 401(k) plans, and more. (National Center for Employee Ownership)
Equity Compensation Report for November 2011
This is the last of the three introductory issues of the NCEO's new equity compensation newsletter; starting in December, it will be available only to NCEO members. It features an interview with Dan Walter and articles on the NCEO's private company equity compensation survey, determining whether secondary markets are right for your company, and communicating valuation. (National Center for Employee Ownership)
Highlights of NCEO's 2011 Private Company Equity Compensation Survey
Earlier this year, the NCEO conducted a pathbreaking survey of equity compensation practices at hundreds of private companies. This page presents the highlights of the results, from the demographics of the respondents to the distribution of equity at their companies. (National Center for Employee Ownership)
New Edition of The Decision-Maker's Guide to Equity Compensation
The revised and expanded second edition of this popular book updates the existing chapters and adds new ones on performance awards and on equity compensation in LLCs. (National Center for Employee Ownership)
About Us


Privacy Policy

Post a Job

Advertise in the BenefitsLink Newsletters

Add Your Company to the Directory of Vendors and Software

Submit a News Item, Press Release, Webcast or Conference

Contact Us

Payment Portal

© 2019, Inc.