Restricted Stock and Direct Stock Purchase Plans
- Topics:
- Compensation Guide,
- Stock Options
- Tags:
- Employee,
- Finance,
- Investment,
- Stock
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Overview: Restricted stock and direct stock purchase plans have become increasingly popular as ways to compensate employees. They are used more broadly as restricted stock refers to shares whose sale or acquisition is subject to restrictions. In employee ownership plans, this typically would mean that an employee would be given shares or the right to buy shares, but could not take possession of them until some time later when certain requirements have been met, such as working for a certain number of years or until specified corporate or individual performance goals have been met. Direct Stock Purchase Plans are plans in which employees can purchase shares with their own funds, either at market price or a discount. In some cases, employers will provide below-market or non-recourse loans to help employees purchase the shares. Employees then hold the shares as individuals with the same rights as other holders of the same class of securities. To know the advantages and disadvantages of these two plans read the article.
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Format: HTML | Date: Jan 2003 | Pages: 1
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