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TRENDS IN ESPP
DESIGN
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ESPP Offerings
1
› All Things ESPP Webinar Series www.computershare.com/allthingsespp
› ESPP Day Conference February 8, 2018 | New York, NY www.computershare.com/esppday
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Disclaimer
2
This webinar and the views expressed herein are not intended to provide legal, tax, accounting or other professional advice. The information contained in this presentation is general in nature and based on authorities that are subject to change. Applicability to specific situations should be determined through consultation with your legal and/or tax advisor.
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Asking Questions
3
Enter your question into the Questions pane on the GoToWebinar Control Panel.
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4
Introductions
Julia Franke, CEP Associate Director, AON Equity Services
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TRENDS IN ESPP
DESIGN
![Page 7: TRENDS IN ESPP DESIGN - Computershare€¦ · presentation is general in nature and based on authorities that are subject to change. ... Trends in ESPP Design Julia Franke, CEP –](https://reader034.vdocuments.us/reader034/viewer/2022042300/5ecab67eef419d3180618bbb/html5/thumbnails/7.jpg)
Prepared by Aon Aon is part of Aon Hewitt, a business unit of Aon plc.
Trends in ESPP Design
Julia Franke, CEP – Aon Equity Services
August 2017
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Aon
Proprietary & Confidential
Introduction
Data
Plan Design Summary
Plan Design Details
Participation
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Aon
Proprietary & Confidential
Plan design features
Plan Type
Non-qualified
423B Qualified
Look-Back
No Look-Back
Look-Back
Discounts
0% - Employer Match
0% - No Match
5%
10%
15%
Other
Length of Purchase Period
Annual
Monthly
Quarterly
Semi Annual
Other
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Aon
Proprietary & Confidential
Plan Type
423B Tax-Qualified plans showed higher average annual contributions and higher participation rates
Non-qualified
423B Qualified
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Aon
Proprietary & Confidential
Plan Type
423B Tax-Qualified plans showed higher average annual contributions and higher participation rates
16%
17%
18%
19%
20%
Non-Qualified 423B Qualified
Ave
rag
e P
art
icip
ati
on
Ra
te
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Non-Qualified 423B Qualified
Ave
rag
e A
nn
ua
l C
on
trib
uti
on
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Aon
Proprietary & Confidential
Plan Type by Market Cap
0%
5%
10%
15%
20%
25%
30%
Small Cap Mid Cap Large Cap
Pa
rtic
ipa
tio
n R
ate
s
Non-Qualified 423B Qualified
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Aon
Proprietary & Confidential
Length of Purchase Period
Longer purchase periods lead to higher contributions and participation up to a point (semi-annual), after which longer periods lead to lower contributions and participation
Annual
Bi-Weekly
Monthly
Quarterly
Semi Annual
Other
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Aon
Proprietary & Confidential
Length of Purchase Period
Annual contribution amounts follow a similar pattern as the participation rates
0%
5%
10%
15%
20%
25%
30%
35%
Monthly Quarterly Semi Annual Annual
Ave
rag
e P
art
icip
ati
on
Ra
te
Average Participation Rate w/ Look-Back
0%
5%
10%
15%
20%
25%
30%
35%
Monthly Quarterly Semi Annual Annual
Ave
rag
e P
art
icip
ati
on
Ra
te
Average Participation Rate w/o Look-Back
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Aon
Proprietary & Confidential
Length of Purchase Period by Market Cap
0%
5%
10%
15%
20%
25%
30%
35%
Small Cap Mid Cap Large Cap
Pa
rtic
ipa
tio
n R
ate
s
Monthly Quarterly Semi Annual Annual
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Aon
Proprietary & Confidential
Discount
Larger discounts lead to higher contribution rates and participation rates
Employer match features drives participation, but not contribution levels
0% w/o Employer Match
0% w/ Employer Match
5%
10%
15%
Other
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Aon
Proprietary & Confidential
Discount
0%
5%
10%
15%
20%
25%
30%
0% w/oEmployer
Match
0% w/Employer
Match
5% 10% 15%
Ave
rag
e P
art
icip
ati
on
Ra
te
Discount
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
0% w/oEmployer
Match
0% w/Employer
Match
5% 10% 15%
Ave
rag
e A
nn
ua
l C
on
trib
uti
on
Discount
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Aon
Proprietary & Confidential
Discount by Market Cap
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Small Cap Mid Cap Large Cap
Pa
rtic
ipa
tio
n R
ate
s
0% w/o Employer Match 0% w/ Employer Match 5% 10% 15%
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Aon
Proprietary & Confidential
Discount by Industry
0%
10%
20%
30%
40%
50%
60%
Part
icip
ati
on
Rate
s
Discount
Participation Rates vs. Discount by Industry
0% w/o Employer Match 0% w/ Employer Match 5% 10% 15%
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Aon
Proprietary & Confidential
Look-Back
Approximately 32% of companies offer a plan with a Look-Back feature
Companies which offer plans with a Look-Back period see higher average contributions and participation rates
No Look-Back
Look-Back
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Aon
Proprietary & Confidential
Look-Back
0%
5%
10%
15%
20%
25%
30%
No Look-Back Look-Back
Ave
rag
e P
art
icip
ati
on
Ra
te
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
No Look-Back Look-Back
Ave
rag
e A
nn
ua
l C
on
trib
uti
on
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Aon
Proprietary & Confidential
Look-Back by Market Cap
0%
5%
10%
15%
20%
25%
30%
35%
Small Cap Mid Cap Large Cap
Pa
rtic
ipa
tio
n R
ate
s
No Look-Back Look-Back
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Aon
Proprietary & Confidential
Look-Back by Industry
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Av
era
ge Y
earl
y C
on
trib
uti
on
s
Average Yearly Contributions vs. Look-Back by Industry
No Look-Back Look-Back
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Aon
Proprietary & Confidential
Participation by Domicile
• Computershare provided enrollment data for 115 different companies in 186 different domiciles
• The 186 domiciles are predominantly different countries, except for the USA, which is broken down into domiciles by state/territory
• Aon has used this data to analyze participation rates by domicile
• For example, there are 5,403 eligible participants in Alaska and 874 are enrolled
• Therefore, the domicile of Alaska was assigned a participation rate of 16.18% (874 / 5,403)
• The overall participation rate across all domiciles is 11.32%
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Aon
Proprietary & Confidential
Weighted Average Participation Rate by Continent
• The participation rate of eligible participants is fairly consistent throughout the US and Internationally
• The overall average participation across all Domiciles is 11.32%.
• Europe and North America have lower participation rates compared to the other continental regions across the world.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Europe North America Oceania Africa Asia South America
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Aon
Proprietary & Confidential
0%
5%
10%
15%
20%
25%
30%
Europe North America Oceania Africa Asia South America
Pa
rtic
ipa
tio
n R
ate
s
Look-Back No Look-Back
Look-back by Continent
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Aon
Proprietary & Confidential
Discount by Continent
0%
5%
10%
15%
20%
25%
30%
Europe North America Oceania Africa Asia South America
Pa
rtic
ipa
tio
n R
ate
s
0% w/o Employer Match 0% w/ Employer Match 5% 10% 15%
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Aon
Proprietary & Confidential
Purchase Period by Continent
0%
10%
20%
30%
40%
50%
60%
70%
Europe North America Oceania Africa Asia South America
Pa
rtic
ipa
tio
n R
ate
s
Monthly Quarterly Semi Annual Annual
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Aon
Proprietary & Confidential
Contact Information
Julia Franke, CEP
Associate Director
Aon Equity Services
(215) 589-5558