Schwab Study: Equity Compensation Plays Major Role in Workers' Retirement Plans and Financial Wellbeing

Professional help boosts confidence and understanding of benefits

Equity compensation is far more than a workplace perk for employees at firms offering this benefit. According to a new survey from Charles Schwab of stock plan participants, three-quarters (76%) say equity compensation is very important, and nearly half consider it a "must-have" benefit when evaluating a new job. Half view equity compensation as a critical tool to help achieve retirement goals, and many say it will help them build/increase wealth (38%), learn more about investing (37%), alleviate financial stress (32%), and boost employee morale (32%). Participants say company stock makes up about one-third of their overall investment portfolios on average.

The survey also reveals gaps in perceived benefits and understanding around valuation, tax implications, and portfolio strategy between participants who are receiving professional advice and those who are going it alone.

"Equity compensation is both a powerful benefit and a meaningful motivator," said Andrew Salesky, Managing Director, Schwab Stock Plan Services. "Employers are always seeking to attract top talent. Through a strong equity program, they can demonstrate a commitment to employees' financial security and also build stronger alignment. Our study shows that when participants understand and strategically use their equity, it can be transformative for their financial wellbeing."

Planning for retirement – and beyond

Nearly three in four stock plan participants (72%) feel very likely to reach their retirement savings goals and 44% say using equity compensation to help finance retirement best describes how they plan to use this benefit. They also intend to use it to support other strategic priorities like financing their own education or children's education (17%), paying off debt (11%), and buying a home (8%).

One in three participants report selling or exercising equity awards to pay for immediate financial needs (32%), diversify their portfolio (29%), or accomplish routine planning goals (29%). Among those who have not sold (67%), nearly half are waiting for more favorable market conditions and 40% are waiting to become fully vested. Some are also concerned about the tax implications (29%).

"Equity compensation plays a dual role — it provides the potential for long-term retirement security while also offering flexibility to address shorter-term financial needs," said Salesky.

"This versatility is part of what makes equity such a valuable workplace benefit, and why participants, supported by their employers, should ensure they understand how to maximize its potential."

Confidence rises with professional guidance

Two-thirds (68%) of stock plan participants say their financial situation warrants professional advice, and those who work with an advisor demonstrate a better understanding of how equity compensation fits into their portfolios.

Participants with an advisor are more likely to know how to exercise or sell their equity, assess the dollar value, and understand the tax implications. Additionally, half (51%) of those with an advisor expect to use equity compensation primarily to help finance retirement, compared to 39% of those without an advisor.

Many participants (56%) already feel very confident making equity decisions on their own, but that number jumps to 67% when they incorporate professional guidance. More than two in five participants already receive professional advice from a financial advisor as well as through their 401(k) plan.

"Confidence and clarity go hand in hand," said Lori Taylor, Managing Director, Client Experience and Product Development, Schwab Workplace Services. "Employers that offer equity compensation have an opportunity not just to deliver the benefit itself, but to connect employees with guidance around diversification, tax planning, and other key considerations. That support is critical to equip workers to make well-informed decisions about their financial futures."

About the survey

This online survey of 420 U.S. equity compensation participants was conducted by Logica Research between April 30 and May 17, 2025. Survey respondents were 21-70 years old, actively employed by companies with at least 25 employees, currently participate in their company's equity compensation and/or employee stock purchase program, and contribute to their company's 401(k) plan. All data is self-reported by study participants and is not verified or validated. Detailed results can be found here.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients' goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on X, Facebook, YouTube and LinkedIn.

Disclosures

Schwab Workplace Services is a business enterprise which offers products and services through Schwab Retirement Plan Services, Inc.; Schwab Stock Plan Services; Designated Brokerage Services; and Schwab Retirement Business Services. Retirement Business Services includes Schwab Retirement Technologies, Inc.® (Schwab RT); Charles Schwab Trust Bank (Member FDIC); and Personal Choice Investment Services.

The Charles Schwab Corporation provides services to retirement and other benefit plans and participants through its separate but affiliated companies and subsidiaries: Charles Schwab Trust Bank (Member FDIC); Charles Schwab & Co., Inc. (Member SIPC, www.sipc.org); and Schwab Retirement Plan Services, Inc.; Schwab Retirement Technologies, Inc. ("Schwab RT"), and Charles Schwab Investment Management, Inc.

Schwab Retirement Plan Services, Inc., provides recordkeeping and related services with respect to retirement plans. Brokerage products and services are offered by Charles Schwab & Co., Inc. (Member SIPC, www.sipc.org). Schwab Stock Plan Services is a division of Charles Schwab & Co., Inc. providing equity compensation plan services and brokerage solutions for corporate clients. Schwab Designated Brokerage Services (DBS), a division of Charles Schwab & Co., Inc., provides technology solutions for corporate clients with regulatory requirements to monitor employee security transactions. Schwab Retirement Technologies ("Schwab RT") develops and licenses retirement plan recordkeeping software, systems, and hosting services for use by independent third-party administrators. Charles Schwab Trust Bank (Member FDIC) provides trust, custody, deposit products and services. Personal Choice Investment Services, a division of Charles Schwab & Co. Inc., provides services and solutions for employee benefit plans and participants.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20250923215430/en/

Mike Peterson

Charles Schwab

234-255-7553

[email protected]

Carly Taylor

The Neibart Group

973-618-6993

[email protected]