ESPP Accenture Employee Financial Planning Guide

As an Accenture employee, you're likely familiar with the Employee Stock Purchase Plan (ESPP). This program allows you to purchase Accenture stock at a discounted rate, which can be a great way to build wealth over time.

The ESPP at Accenture is a 10b5-1 plan, which means it's designed to help employees buy and sell company stock while complying with SEC regulations. This is important because it ensures the plan is fair and transparent for all participants.

The purchase price for Accenture stock through the ESPP is typically 85% of the market price, which can be a significant discount for employees. This can help you save money on your stock purchases and make the most of your investment.

By participating in the ESPP, you can take advantage of this discounted rate and potentially earn a profit when you sell your shares in the future.

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Accenture offers a 15% discount on shares purchased through its ESPP program. Employees can contribute up to 10% of their total compensation, accumulating for six months until the stock is purchased.

The ESPP contributions max out at $15,000 or $7,500 per each ESPP period. You need to enroll in the program before the set start dates.

After that, you elect after-tax contribution between 1%-10%, which accumulates in a separate account until the six-month period ends in either May or November. The ESPP purchase price is the stock’s average price on the last day of the ESPP cycle.

The amount accumulated is used to purchase the shares based on that average stock price. It takes a few days for the stock to purchase and show up in the Morgan Stanley account.

After the stock shows up, employees can sell the shares whenever they’d like or hold onto them in the Morgan Stanley account.

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Accenture's Employee Stock Purchase Plan (ESPP) can have a significant impact on your cash flow and tax situation.

You can purchase Accenture stock at a discounted price, but you'll need to pay taxes on the difference between the purchase price and the fair market value of the stock at the time of sale.

If you sell your Accenture stock within two years of the purchase date, the gain will be considered short-term and taxed as ordinary income.

The Employee Stock Purchase Plan (ESPP) can be a great way to build wealth, but it can also have some cash flow implications.

You'll need to commit to having 10% of your paycheck deducted to fund the plan.

This reduced paycheck can be a challenge, especially for those on a tight budget.

However, the money will come back to you, typically with a nice increase.

Paycheck withdrawals fund the ESPP, so once you commit, it all happens automatically.

If you're able to max out the ESPP investment, you'll be using a significant portion of your income, but it can be worth it in the long run.

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The tax implications of a voluntary equity program can be complex, but let's break it down.

You'll be taxed on the "free" 50% RSU match as ordinary income when the grants vest, which can be a big tax hit.

The program is non-qualified, meaning you're taxed on the "free" money, including the RSU match, as ordinary income.

You'll pay a lot of taxes when the RSU award vests after two full years, and the full amount will be treated as income for tax purposes.

If you received a large grant and the stock price doubles, you'll pay a lot of taxes, including half of the gain to the government.

The automatic monthly purchases can make you susceptible to the "wash sale" rule, which means you can't repurchase shares for 30 days if you want to claim a loss.

You'll have to pay ordinary income taxes on any gains if you sell the shares before one year, which takes you back into the ordinary income tax level.

If you sell the shares after one year, any gains are taxed at long-term capital gains rates, ranging from 0-23.8% federal + state tax.

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The Accenture ESPP is giving you a minimum 17% bonus, minus taxes, of course. This bonus is a significant incentive to participate in the program.

Participating in the ESPP can lead to substantial long-term gains, as seen in the example of the person who held onto their stock and saw it increase in value. They mention that the ~$20k of stock they sold in 2009 and 2010 would be worth about 4x that amount today.

Accenture managers and partners who never sold their shares have been rewarded with substantial wealth, accumulating shares at under $20 per share and now owning them at $200 per share.

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The Accenture ESPP can give you a minimum 17% bonus, minus taxes, of course, on your stock purchases.

Participating in the ESPP can be a great way to accumulate shares, as many Accenture managers and partners I worked with never sold their shares, which they started accumulating at under $20 per share.

The reduced cash flow from participating in the ESPP shouldn't adversely impact your living situation, or it could have long-term consequences.

If you do decide to sell some of your shares, like I did in 2009 and 2010, you might be leaving money on the table, as the value of your shares could increase significantly over time.

At $200 per share, the value of your shares could be 4x what you sold them for, which is a pretty significant return on investment.

However, it's also worth considering that the investment you make in your personal life, like I did with my wife, is priceless and can't be measured in dollars and cents.

If you're an Accenture Managing Director, you're in luck - you don't have to settle for the ESPP.

Managing Directors have access to the Voluntary Equity Investment Program (VEIP), which is actually considered an even better option.

This program is specifically designed for high-level executives, and it's a great way to invest in company stock without the ESPP's limitations.

As a financial advisor, I've seen firsthand how VEIP can be a game-changer for clients in this role.

Part of my job is to help clients like you plan out their cashflows to maximize the benefits of programs like VEIP and minimize the taxes.

Accenture's Voluntary Equity Investment Program (VEIP) allows leadership to designate 30% of their total cash compensation to purchase Accenture shares.

Total cash compensation is calculated based on gross income and bonuses, meaning before taxes, Social Security, Medicare, and 401(k) contributions are taken out. This makes the 30% contribution amount a significant deduction from after-tax income.

Participants receive a 50% matching Restricted Stock Unit (RSU) grant in January, calculated based on the total number of shares purchased the previous program year and not sold or transferred before the awarding of the matching grant.

The grant vests in two years from the grant date, and if a participant leaves Accenture or withdraws from the program before receiving the matching grant, they won't receive it.

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Accenture offers a 15% discount on shares purchased through its ESPP program. Employees can contribute up to 10% of their total compensation, accumulating for six months until the stock is purchased.

The ESPP contributions max out at $15,000 or $7,500 per each ESPP period. This means that employees can save a significant amount of money over time.

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To participate in the ESPP, you need to enroll in the program before the set start dates. This is a crucial step, as you won't be able to join later.

After enrolling, you can elect to contribute between 1%-10% of your after-tax compensation, which will accumulate in a separate account until the six-month period ends in either May or November.

The ESPP purchase price is based on the stock's average price on the last day of the ESPP cycle. This is an important detail, as it affects the price at which you'll buy the shares.

It takes a few days for the stock to purchase and show up in the Morgan Stanley account. This is something to keep in mind if you're expecting the shares to be available immediately.

Once the shares are in your account, you can sell them whenever you'd like or hold onto them in the Morgan Stanley account.

The VEIP program allows leadership to designate 30% of their total cash compensation to the purchase of Accenture shares.

Total cash compensation is calculated based on gross income and bonuses, which means before taxes, Social Security, Medicare, and 401(k) contributions are taken out.

The 30% contribution amount is then deducted from after-tax income to make monthly purchases of Accenture shares at fair market value on the 5th of each month, based on the contributions from the previous month.

The program is non-qualified, which means you're taxed on the "free" 50% RSU match as ordinary income when the grants vest.

The monthly VEIP stock purchases are made after-tax, so there aren't any tax implications on the purchases made throughout the year until those shares are sold.

If you leave Accenture or withdraw from the program before being awarded the matching grant, you won't receive the grant.

However, you will get a match on the stocks you hold throughout the program year even if you sell some along the way.

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The VEIP RSU grant takes two full years to vest from the grant date, which means you'll have to hold onto the shares for at least two years to receive the full matching grant.

If you sell shares before one year, any gains are taxed as short-term capital gains, which takes you back into the ordinary income tax level.

If you hold shares longer than one year, any gains are taxed at long-term capital gains rates (0% – 23.8% federal + state tax).

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