Employee Stock Purchase Plan


Employee Stock Purchase Plan (ESPP)

A plan usually linked to a corporation's payroll deduction system allowing employees to purchase shares at a discount from current market value.

Employee Stock Purchase Plan

An employee benefit that some firms offer allowing employees to use payroll deductions to buy shares in the firm at a discount from their fair market value. The firm offers this to employees at certain times; those who participate in the program allow the payroll deductions to accumulate for a certain number of pay periods. At the end of the period the firm uses the funds to purchase the number of shares worth that amount. The percentage discount varies from firm to firm, but can be as much as 15%.