My company recently introduced a new employee share scheme, and I’m not sure if it’s a good deal.
Here’s how it works: Employees contribute a certain amount of money every month, which gets invested in company shares through a third party. The programme lasts for 24 months. For the first 12 months, we contribute money, and after that, no more shares can be bought. At the end of the 24 months, the company will match the amount of shares each employee has purchased. We can only sell the shares after 24 months.
This is my first time getting into shares and investments, so I’m not sure if this is a good opportunity or if I should be looking at other factors before deciding whether or not to join. Any advice would be really helpful, thanks!
Wait, they’re matching 100% of what you put in after 24 months? That sounds like a great deal. Unless you don’t believe in the company, I’d say go for it.
Terry said:
Wait, they’re matching 100% of what you put in after 24 months? That sounds like a great deal. Unless you don’t believe in the company, I’d say go for it.
Yeah, that 100% match is a pretty big deal. Unless it’s a really bad company, it’s hard to lose out.
From what you’re describing, it doesn’t sound like a great deal. 24 months is a long time to wait for a company match, and you can’t even sell the shares until after that.
My company’s plan is different. They buy shares twice a year with a 15% discount, based on either the current price or the price from the last purchase date. And we can sell the shares right away.
Do you plan to stay with the company for the full two years? Is there a market for selling the shares when you want to?
Ash said: @Phoenix
This is my first job after university, so I don’t plan on leaving anytime soon, but I can’t promise I’ll still be here in two years.
Are there any other retirement benefits, like a matching 401k or something similar?
Ash said: @Phoenix
This is my first job after university, so I don’t plan on leaving anytime soon, but I can’t promise I’ll still be here in two years.
You should find out what happens if you leave after your 12 months of contributions. Will they still match you? Do you keep the shares you’ve already purchased? Do they give you a payout of everything you’ve put in? And make sure you understand the tax implications if you get a lump sum payout, just in case you leave before the programme ends.
@Jai
Also, if you feel like asking questions about your money is bothering management, that could be a red flag. You should be able to get clear answers, especially when it comes to something like this.
What price are the shares bought at? Is it the price when the programme starts or after 12 or 24 months? You mentioned they match the number of shares—does that mean the actual number of shares, or are they matching the money you contributed?