A share purchase plan (SPP) encourages the investment in the shares of a company by the employees, using their own contributions. Sometimes, employer contributions are also made in conjunction with those made by employees. Generally, there is a limited number of shares that can be purchased — either from treasury or on the open market.
Enrolment in this kind of program may depend on the employee's position in the company and/or length of service. Also, an employee's entitlement to the contributions made by the employer will be determined by the plan's vesting rules. This prevents these employer-paid shares from being withdrawn immediately. Membership in an SPP can motivate employees to achieve company goals and business objectives. It is also an excellent benefit to offer to existing and potential employees.