A landmark day for stock plans

By Carver Edison

Today was a big day at Carver Edison. A public company client received a private letter ruling from the IRS concluding that the company could add our patented technology, Cashless Participation®, to its ESPP while retaining qualified tax status for the plan. Cashless Participation is an enhancement to stock plans that companies can use to help employees and address wealth inequality challenges within the workplace. The technology is supported by E*TRADE’s Equity Edge Online® platform—which is the stock plan administration platform of choice for more than 500 public companies.

This letter ruling is the first the IRS has made regarding ESPPs in 14 years and it’s is an important step forward for both Carver Edison and the greater adoption of ESPP plans.

As you may know, ESPPs allow employees of public companies to purchase a limited amount of company stock at a discount, typically 15%. However, ESPPs are largely underused as most as employees can’t afford the significant payroll deductions these plans require.

Our technology integrates with any share plan administration platform, allowing public companies to offer Cashless Participation seamlessly and reap the benefits of increased ESPP participation.

Carver Edison is helping turn employees into shareholders.

Also, in other news, Carver Edison’s latest investment round was led by Eli Broverman’s venture firm, DDC Ventures. Eli is the co-founder of Betterment, the largest independent Robo Adviser with over $15 billion under management. Several notable FinTech investors also participated in the financing, including Jeff Cruttenden, founder of Acorns.

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