Revised Employer Stock Purchase Program (ESPP) -- bad deal?

As a result of being acquired, my employer is changing its ESPP from a 30% discount on Swiss-listed shares (vesting period: 3 years) to a 15% discount on Australia-listed shares (vesting period: 1 or 3 years*).

Contributions to the ESPP are automatically deducted from payroll, so there’s no doubt that this is a great offer for those who would benefit from a forced/frictionless savings plan; however, I already invest a fixed amount monthly into VTI using my IB account, so this would simply replace a portion of what I already invest.

When the ESPP discount was 30% for Swiss-listed shares, participation was a no-brainer. But now that it’s only a 15% discount and for Australia-listed shares (which I assume has certain tax implications, or at the very least leaves me exposed to the Australian dollar which is perhaps less-than-ideal), I’m on the fence about whether this program is worth it. Looking forward, although it’s impossible to predict the future, I anticipate that the share price will stay stable or increase by low single-digits on an annual basis, and my philosophy would be to sell immediately after the vesting period and re-invest into VTI in order to decrease my overall investment risk.

Given the same option, would you enroll in the revised ESPP or simply continue to invest the corresponding amount into VT(I) instead?

*Regarding the two vesting periods, the corresponding section of the provided tax guide states the following:

For restricted shares, the taxable value is the fair market value of the shares at grant less the purchase price (if any), reduced by the applicable discount for the blocking period / vesting period on the award. A discount of between 5.7% (one year of restriction) and 44.2% (ten years of restriction) on the market value is applied.

No withholding taxes on dividends, if it is relevant for you :rofl:

You still have an exposure to shares, no matter the currency. But I guess now these are shares of the company that have acquired yours.

Is short selling shares after buying them locked with a discount an option for you? (Just an idea)

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If this is your expectation, even with a %30-40 safety margin, you will have more return than VTI‘s average.

I also get %15 and believe that the shares will bring at least the market return. So I’m full in

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IMO this adds a lot of risks, for me it would really depend which fraction of your NW that is, because you could lose both your job and your money if the company has some bad times.


AFAIK most employer stock programs forbid this (also buying employer stock on margin). This also protects you from potential insider trading accusations.

Frankly, betting against your employer will look bad on you if it becomes known. Even if it’s not forbidden, it could put your employment at risk (you’re betting against your employer after all).

It could certainly be useful to hedge against share risk, but is it really worth it?