Workplace and Employee Survey: Stock purchase plans

Nearly 1 in every 10 private-sector employees, about 815,000, had a stock purchase plan in 1999, according to a new study based on data from the Workplace and Employee Survey.

Stock options garnered headlines during the recent high-tech boom and bust. While media attention focussed on fortunes gained and lost, little background information was offered on the nature of various plans, or the employers and employees involved. A new study, available today in the online version of Perspectives on labour and income, fills this gap.

Of the 815,000 employees who had a stock purchase plan, 81% worked for employers who contributed or offered discounts on purchases. Participants tended to be middle-aged or older, work full time and have permanent jobs.

In 1999, stock purchase plans were more heavily concentrated among employees with higher earnings, and in certain occupations and industries. Employees with stock purchase plans also tended to work in large workplaces, particularly those with 500 or more employees.

Almost one-third of professionals, such as engineers, scientists and architects, as well as computer programmers and systems analysts, had stock purchase plans in 1999.

More than one-third of employees in the computer and telecommunications sector had stock purchase plans in 1999, as did about one-quarter of employees in forestry, mining, and oil and gas extraction. About 20% of employees in information and cultural industries had such plans; the construction sector had the lowest incidence, less than 3%.

Although more than 60% of private-sector employees worked in environments with less than 100 employees, these workplaces were less likely to have stock purchase plan participants than larger firms. About 13% of employees in firms with 100 to 499 employees had plans, as did 20% of those in firms with 500 employees and over.

The median hourly wage of stock purchase plan participants was $22, about $7 more than then median wage of those with no plan. Overall, the prevalence of stock purchase plans rose with wages and salaries.

Three types of stock purchase plans are common in Canada. They can be combinations of employee ownership and equity plans. The best known is a stock option, which is a legal agreement between an employee and employer giving the employee the right to buy a fixed number of company shares at a fixed price.

The article "Taking stock of equity compensation" is available in the March 2003 online edition of Perspectives on labour and income, Vol. 4, no. 3 (75-001-XIE, $5/$48).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Sophie Lefebvre (613-951-5870; sophie.lefebvre@statcan.gc.ca), Labour and Household Surveys Analysis Division.