Employee Liquidity Programs

Based in St. Louis, Missouri, RainMaker Securities serves clients as a licensed general securities broker/dealer in US capital markets in 22 states. A FINRA/SIPC Member Firm, RainMaker Securities specializes in helping private emerging-growth companies with mergers, acquisitions, raising capital, and employee liquidity programs.

Liquid assets are those that can easily be converted into cash. Sometimes associated with employee recruitment and retention benefit packages, employee liquidity is commonly presented as an employee stock purchase program (ESPP) that allows workers to allocate a portion of their salary to buy company stock, often at a discounted price. Some ESPP plans include a look-back period, which bases the price of the stock on its lowest price within that period of time, typically three to six months.

A majority of ESPP plans are qualified plans, meaning no taxes are paid on any paper profits until the employee sells his or her shares, and the total value of shares that can be purchased annually is $25,000. Nonqualified plan participants must pay taxes on any gains at tax time but have no purchase restrictions.

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