May 4, 2021
IPOs: Right-Sizing Stock Plans
– Liz Dunshee
Page 27 of this WilmerHale IPO Guide walks through market practice for stock incentive plans and employee stock purchase plans at the time of going public. Here are a few interesting stats about ESPPs adopted in connection with 2020 IPOs:
– 70% of 2020 IPOs had an ESPP in place – compared to 47% in 2016
– 94% of those ESPPs included evergreen provisions – compared to 83% in 2016
– 99% of 2020 ESPPs provided a 15% discount – compared to 94% in 2016
– 99% of 2020 ESPPs included a “lookback” feature – allowing the discount to be taken from the market price at the beginning of the offering period – compared to 94% in 2016
– 9% of 2020 ESPPs said the initial ESPP offering period commences upon IPO – compared with 31% in 2016