In theory, Carver’s model may seem like a no-brainer. But the firm will still have to figure out how to get people to understand and buy into its concept, which adds another layer of complexity to a topic that many companies already struggle to explain to workers, said NCEO’s Rosen.
“Whether this specific idea will be the one that gets past these barriers, I don’t know,” he said.
Shareholder Dilution
Shapiro said he’s convinced it’s possible. Carver will provide educational material to clients to boost sign-ups among workers as part of its offering.
Greater participation will also increase shareholder dilution and result in higher compensation costs, which could be a deterrent for some companies, according to Aon’s Burg. Still, the program brings accounting benefits, and “my experience is that most companies with an ESPP want higher participation and believe in the benefits derived from the program,” he said.
Aon has already seen interest among some clients in Carver’s offering and expects “a handful of early adopters in late 2019,” he said. As companies grow more familiar with the concept, “we will see a wave of quick followers.”
This article was provided by Bloomberg News.