Determinants of Participation in and Contributions to All-Employee Stock Plans

Abstract

Introduction This paper assesses influences on participation in and contributions to all-employee stock plans, using empirical data on the U.K. Save As You Earn (SAYE or Sharesave) plan. All-employee stock plans enable employees to acquire options in their companies’ shares while subscribing to a tax advantageous Save As You Earn saving contract so that options can be exercised in three, five, or seven years time. These plans have been popular among U.K. companies and their employees since their introduction over twenty-five years ago. In most years during the 1990s around one million employees (3–4 percent of the employed workforce) typically subscribed to a new SAYE offer.