Equity Compensation Key Driver of Employee Retention and Engagement, Study Finds
30 Mai 2024 - 4:00PM
Business Wire
- Equity compensation gaining in popularity as more companies
offer stock plan benefits
- Employees and HR leaders see equity compensation
differently
- Despite progress, gaps remain in equity education and
awareness
Morgan Stanley at Work today issued results from its fourth
annual State of the Workplace Financial Benefits Study, showing
that equity compensation continues to grow in demand among both
employees and HR leaders alike, and at both public and private
companies. While employers cite equity as the top driver of
employee engagement and retention, opportunities remain to help
employees better understand the financial opportunities available
to them through equity ownership.
Key findings from the study include:
- Equity compensation is growing in popularity across the
board: More HR leaders report that their companies (76%) are
offering some form of equity compensation benefits—up four
percentage points year-over-year and a 12-point increase since 2021
(65%).
- Equity compensation retains MVP status for driving employee
engagement: Nearly all (95%) HR leaders say equity compensation
is the most effective way to keep employees motivated and engaged,
which has remained virtually unchanged year over year (97% in 2023,
95% in 2022, and 93% in 2021)—and four in five employees agree
(80%).
- Liquidity is a laser focus at private companies: Over
three in five employees at private companies (62%) say the prospect
of a future liquidity event or IPO is very or somewhat important to
them. Liquidity events are even more top-of-mind for HR leaders,
with 86% saying it’s important to consider a liquidity event (such
as a tender offer) in the coming 12-24 months—and even more (88%)
for an IPO.
- Employers more likely than employees to see long term value
in equity compensation: Employees’ perception of equity
compensation as a long-term investment vehicle diminished over the
past year (down six percentage points from 2023), highlighting the
challenge in front of HR leaders—who more firmly believe in the
merits of equity compensation for meeting long-term investing goals
such as retirement. This suggests more can be done to help
employees understand and integrate their equity compensation into a
comprehensive financial approach.
- And awareness and education gaps persist: Despite the
growing demand and popularity of equity compensation, only 38% of
employees say they are aware that their company offers these
benefits, and less than half (45%) of both employees and HR leaders
said their company’s participant education program is very
effective—indicating important opportunities for improvement.
“The data shows that equity has become a key driver of
retention, engagement, and value across the entire organization—and
one of the most powerful tools to sync employees with the success
of their companies,” said Kate Winget, Chief Revenue Officer of
Morgan Stanley at Work. “Equity plan engagement can have a direct
impact on employee satisfaction and goodwill, whether it’s through
education programs, executive support, or collaborating with
providers on plan management. Expanding participant eligibility,
education, and access to liquidity events can be a game-changer for
companies and their talent.”
Additional details are available in Morgan Stanley at Work’s
State of the Workplace Study here. As part of a series of findings
from Morgan Stanley at Work’s fourth annual study, the business
will also publish its findings on financial benefits and retirement
benefits in the coming weeks.
Methodology: The data from the Morgan Stanley at Work
Employees Survey and HR Leaders Survey comes from a survey of 1,000
U.S.-employed adults and 600 HR leaders for companies. The survey
was conducted on behalf of Morgan Stanley at Work using an email
invitation and an online survey between February 5 and February 12,
2024, by Wakefield Research (www.wakefieldresearch.com).
About Morgan Stanley at Work
Morgan Stanley at Work provides workplace financial benefits
that build financial confidence and foster loyalty—helping
companies attract and retain top talent. Our end-to-end solutions
support your organization at any stage of growth through a powerful
combination of modern technology, insightful guidance, and
dedicated service; they include Equity, Retirement, Deferred
Compensation, Executive Services, and Saving and Giving solutions.
And while we’re fulfilling your company’s benefits needs, we’re
also enhancing your employees’ financial well-being. Each benefit
solution also includes our engaging Financial Wellness program,
which provides employees with knowledge, tools, and support to help
them make the most of their benefits and achieve their life
goals.
About Morgan Stanley Wealth Management
Morgan Stanley Wealth Management is a leading financial services
firm that provides access to a wide range of products and services
to individuals, businesses, and institutions, including brokerage
and investment advisory services, financial and wealth planning,
cash management and lending products and services, annuities and
insurance, retirement, and trust services.
About Morgan Stanley
Morgan Stanley is a leading global financial services firm
providing a wide range of investment banking, securities, wealth
management and investment management services. With offices in 42
countries, the Firm’s employees serve clients worldwide including
corporations, governments, institutions and individuals. For
further information about Morgan Stanley, please visit
www.morganstanley.com.
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Media Relations: Jeanne Joe Perrone,
Jeanne.Perrone@morganstanley.com Lindsey Madnick,
Lindsey.Madnick@morganstanley.com
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