Compensation plays a crucial role in building an engaged and committed workforce. Equity incentive programs, such as employee stock ownership plans (ESOPs) and employee stock purchase plans (ESPPs), can be effective tools for helping employees achieve financial wellness—which supports a company’s recruitment, retention and reputational goals. But women are less likely than men to take advantage of these programs.1
By making these plans more inclusive and broad-based, companies may realize benefits for both their employees and their bottom line. Here’s a look at how women’s career paths can differ from men’s and how a well-structured equity compensation program could women achieve financial wellness while supporting a company’s recruitment and retention efforts.
Women’s Careers: A Different Path
Women make up 47% of the U.S. workforce2 and earn more college and advanced degrees than men,3 but their career—particularly mid-career—experiences tend to be vastly different from those of their male counterparts. These differences impact women’s financial wellness, their overall career trajectory and their likelihood of participating in equity programs.
Let’s trace the hypothetical careers of Sarah and Michael.
Sarah and Michael have similar backgrounds, education and career aspirations. They join the same company at the same entry level, where they earn the same pay and have access to the same benefits. Both are viewed as rising stars, and both advance quickly. At this point, Sarah and Michael are on an equal footing.
The divergence starts mid-career. They both find partners and start families. Sarah, like many women, decides to pause her career and take a few years out of the workforce to take care of her young family.4 When Sarah rejoins the workforce, she secures a role that prioritizes flexibility (which often means less pay) to account for her caregiving responsibilities.5 In contrast, Michael does not exit the workforce or the organization, and despite having a new family continues to advance in his career, earning higher pay, gaining access to benefits like equity compensation, and generally building greater amounts of wealth.