company stock plans

[fultron]

If you work for a public company do they offer an employee stock purchase plan? I've read that the tax laws have changed in the last year or two and that many companies are cutting back or eliminating the discounts these plans provide because the tax breaks they received were cut back.

[jmjj215]

I don't think it's the tax laws that changed - it's the accounting rules, as issued by the FASB.

Previously, a company could compensate employees with stock options and the entry was only made to the balance sheet (equity change). Now, those stock options must be expensed, which affects the bottom line on the P&L.

I work for a public company and they stopped the ESPP as a result of this. It's kind of lame thought. Whether you show the expense on the P&L or not, your cash position is still the exact same. Plus, if every other company (your competitors) must also expense, you're all still in the same ball game.

It's too bad, because I really enjoyed the gains I made on the ESPP. A guaranteed 15% on the withheld money (less taxes) every six months.

[fultron]

Thanks for the clarification Jesse, I couldn't remember the details.