ESPP AT UDEMY

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (ESPP) lets you buy company stock at a discounted price through payroll deductions. It encourages employee ownership by allowing you to invest in the company’s growth.

How it works

1

Enroll: You can sign up for the Employee Stock Purchase Plan in May and November each year. Enrollment is May 1 to May 15 and Nov. 1 to Nov. 15.

2

Contribute: Payroll deductions occur for six months based on your elected percentage (from 1% to 15%). You can change your contribution rate during each enrollment window.

3

Purchase: Your accumulated payroll deductions are used to purchase discounted company shares. Purchase dates are May 20 for November enrollments and November 20 for May enrollments.

4

Sell or Hold: You can sell acquired shares (in a non-blackout period) or retain them for potential future gains.

Special features

We help you share in the company's growth in two ways

15% DISCOUNT

Our ESPP allows you to purchase shares at a discount of at least 15% off the stock market value on the purchase date. 

24-MONTH LOOKBACK

If the stock price is lower at the start of the offering period than on the purchase date, the 15% discount is applied to the beginning stock market price.

You’ll receive a 15% discount on whichever is lower: the stock price when the offering period begins, or the price on your purchase date. That helps you maximize your investment.

How an ESPP purchase works

  • For
    Example

    Example for educational purposes only, and assumes annual wages of $200,000. Fictional past performance is no guarantee of future results.

    You enroll in ESPP in May when the stock price is $10.

    You choose to contribute 10% of your wages.

  • During the next 6 months, 10% is deducted from your check each pay period after taxes are deducted. This accumulates to $10,000 for the purchase period.

  • In November, the stock price is at $14.

  • The stock price's growth during the lookback period means you're in luck: Your price is set at $10, as it was when you enrolled, and the 15% discount is applied to that price, not the higher November price. Your price per share is only $8.50.

  • 1,176 shares with lookback

    The $10,000 that you contributed over the past 6 months is used to purchase 1,176 shares at $8.50 per share.

    714 shares without lookback

    Without the ESPP lookback or discount, that same $10,000 would purchase only 714 shares at $14 per share.

  • Your $10,000 investment has a value of $16,464.

    Now you can sell your shares (during non-blackout periods) or hold them to sell later.