If you work at Adobe, you may be eligible to enroll in the employee stock purchase plan (ESPP). To help you make the most of this opportunity, we’ve put together a comprehensive guide to all the ins and outs of this program, from how it works to how you enroll.
If you’d like to learn more about how ESPPs work in general, be sure to read our blog about an overview of employee stock purchase plans.
Here’s a quick rundown of how Adobe’s ESPP works.
- You can buy Adobe stock at a 15% discount.
- You can enroll twice a year in:
- You can contribute up to 25% of your salary with a maximum of $21,250 per year.
Should You Participate In Adobe’s ESPP?
When you enroll in Adobe’s ESPP, you have the opportunity to purchase shares of your company stock at a discounted price through automatic payroll deductions.
The benefits of participating in an ESPP are clear – you can make gains and build wealth. In fact, Adobe employees can gain $3,750 or even more annually through their ESPP.
Adobe’s ESPP Discount
Adobe offers employees an opportunity to buy Adobe stock at a 15% discount.
Adobe’s ESPP Lookback
Adobe’s ESPP has a lookback provision for calculating the purchase price. A lookback provision is a beneficial feature that will base the purchase price for calculating the discount on the stock price either at the beginning of the offering period or at the end of the purchase period, whichever is lower.
So if Adobe’s share price increases during the offering period, you pay 85% of Adobe’s share price on the offering date. In this scenario, the discount from the market price will exceed 15%.
Let’s look at an example:
- Share price on Jan 1 =$100
- Share price on Jun 30 = $115
- Purchase price = $85
- Gain / share = $30
To explain – the lookback feature would pick the lower of the two prices, which is $100, and then apply the discount of 15%.
This means you would buy shares at $85 ($100 – the 15% discount), However, they would be worth $115. In other words, you would earn $30 for every $85 you put into your ESPP.
Adobe’s ESPP Enrollment Periods
You can enroll in Adobe’s ESPP twice a year, in the December and in June.
Adobe’s ESPP Contribution Limits
The first thing you need to do is decide how much you want to contribute. You can contribute up to 25% of your salary, with a limit of $21,250 per year.
Adobe’s ESPP Offering Period
The offering period is the time that employees can purchase the stock. Adobe’s employee stock purchase plan (ESPP) has an industry best 24-month offering period with purchases every 6 months.
When you’re participating in Adobe’s ESPP, you set aside money from each paycheck from the beginning of a purchase period through the end. At the end of this purchase period, the money that has been set aside is used to purchase company stock at a discount.
If you are interested in Adobe’s ESPP, here are some key dates to keep in mind.
The offering periods are
- Jan 1st – Jun 30th
- Jul 1st – Dec 31st
The stock purchase dates are the last trading day before the end of each period.
Selling Your ESPP Shares
Once Adobe purchases the shares on your behalf, they will be deposited into your brokerage account. From there, you can do what you want with them…sell immediately (as long as it’s during the open trading windows), hold for a short time, hold for an extended time, etc.
How does Benny help me make the most of Adobe’s ESPP?
Benny makes it easy to participate in Adobe’s employee stock purchase plan by giving you cash to match your ESPP paycheck deduction so you can get the benefits of your ESPP without impacting your take-home pay.
For example, if you’re contributing $350 per paycheck to Adobe’s ESPP, Benny will deposit $350 in your bank account before each paycheck’s pay date.
Use our ESPP calculator to see how much you can earn with Adobe’s ESPP.