Equity compensation emerges as key retirement tool for American workers, Schwab says

Equity compensation is taking on a growing role in the retirement strategies of American workers, with new research from Charles Schwab showing that nearly all stock plan participants consider it an important workplace benefit.

Three-quarters of those surveyed described equity compensation as “very important,” and almost half said it is essential when evaluating new job opportunities.

The survey, which polled 420 US employees participating in equity compensation or employee stock purchase plans, found 46% count it as a "must-have" benefit when looking for new employment. 401(k) plans topped that list of non-negotiables (82%), followed by health insurance (78%) and life insurance (57%).

Half of respondents see equity compensation as a critical tool for reaching retirement goals. Beyond retirement, participants cited building wealth (38%), learning about investing (37%), alleviating financial stress (32%), and boosting pride in taking part of their employers company's growth (32%) – perhaps similar to the multi-billion dollar stock incentive Elon Musk recently got from Tesla – as additional advantages.

On average, company stock accounted for about one-third of participants’ investment portfolios.

The findings suggest that equity compensation is not just a perk but a significant factor in workers’ financial wellbeing and long-term planning. “Equity compensation is both a powerful benefit and a meaningful motivator,” said Andrew Salesky, managing director at Schwab Stock Plan Services.

He noted that a robust equity program can help employers demonstrate a commitment to employees’ financial security and foster stronger alignment with company goals.

Nearly three in four participants said they feel very likely to achieve their retirement savings targets, and 44% plan to use equity compensation to help finance retirement. Others intend to use the benefit for education expenses, paying off debt, or buying a home.

Among those who have exercised or sold equity awards, the most common reasons were meeting immediate financial needs, diversifying portfolios, or following a long-term plan. For those who have not yet sold, nearly half are waiting for more favorable market conditions, while 40% are waiting to become fully vested.

Professional guidance appears to play a significant role in how participants approach equity compensation. Two-thirds of respondents said their financial situation warrants advice from a professional.

Read more: Getting equity comp? Better have a financial plan, report finds

Those working with an advisor were more likely to understand how equity compensation fits into their overall portfolio, know how to exercise or sell awards, and grasp the tax implications. Fifty-one percent of participants with an advisor expect to use equity compensation primarily for retirement, compared to 39% of those without one.

“Confidence and clarity go hand in hand,” Lori Taylor, managing director for client experience and product development at Schwab Workplace Services, said in a statement unveiling the results.

She added that employers offering equity compensation have an opportunity to connect employees with guidance on diversification, tax planning, and other considerations, helping them make well-informed financial decisions.

The survey also found that more than two in five participants receive professional advice from a financial advisor or through their 401(k) plan, underscoring the value of guidance in navigating equity-based benefits.

The online survey was conducted by Logica Research between April 30 and May 17, 2025, and included participants aged 21 to 70 who are actively employed and contribute to their companies’ 401(k) plans.