Walmart and Chipotle are making moves to ensure their employees have a stake in the companies’ success by completing stock splits, a tactic that has been gaining popularity among big U.S. corporations. Walmart recently completed its first stock split in over 20 years, while Chipotle is planning its first stock split in its 30-year history to be effective in June.
The decision to split shares comes at a time when the stock market is booming, with Chipotle’s stock trading near $3,000. Both companies aim to make shares more accessible to employees through an employee stock purchase plan and financial education offerings. However, experts warn that simply offering stock ownership opportunities may not be enough to entice employees to invest.
Financial and benefits consultants emphasize the importance of financial education and incentives to encourage employees to participate in company stock programs. Without proper education and support, many employees may prioritize everyday expenses over investing in company stock.
While stock splits can make shares more affordable, companies need to go beyond just splitting shares to encourage employee stock ownership. Offering discounted stock through an ESPP, providing financial education, and creating incentives for employees to invest are crucial steps in ensuring employee participation in company stock programs.
Companies like Walmart and Chipotle are also enhancing their financial education offerings to employees, partnering with organizations to provide free online courses and tools on budgeting, savings, investments, and retirement planning. However, experts caution that for employees struggling to make ends meet, investing in company stock may not be a top priority.
Ultimately, companies looking to increase employee participation in company stock programs may need to consider enhancing their offerings, such as providing discounts on stock purchases, extending lookback periods, or offering equity awards as part of compensation packages. While these strategies may come at a cost to companies, the long-term benefits of having employees invested in the company’s success could outweigh the expenses.
