More U.S. workers bought their employers’ stock in pandemic

© Reuters. FILE PHOTO: A street sign, Wall Street, is seen outside New York Stock Exchange (NYSE) in New York City, New York, U.S., January 3, 2019. REUTERS/Shannon Stapleton

By Jessica DiNapoli

NEW YORK (Reuters) – More U.S. workers bought shares in their companies through employee stock purchase plans during the COVID-19 pandemic, according to a study from Rutgers University.

Average worker participation rate in employee stock purchase plans rose to 28% in March 2021 from 23% in January 2020, according to the study. The study’s findings will be released on Friday at a conference on worker equity compensation and stock ownership at Rutgers.

The study attributes the increase to some of the effects of the COVID-19 pandemic on financial markets. Company shares fell and then steadily gained in value last year, helping workers gain confidence in investing in their employers, according to the study, which analyzed 40 corporations.

Workers tend to be risk-averse and view participating in employee stock purchase plans as similar to a savings account, according to the study, which was done with the assistance of Computershare Investor Services Plc.

“As the pandemic progressed, workers also took into account their organization’s long-term financial stability before investing more of their hard-won salary,” Joo Han, a professor at Rutgers who authored the study, said in a statement.

Workers can buy their employer’s shares at a discount through some of the stock purchase plans. The study found that companies that offer employees greater discounts on their stock will on average have more worker participation.

More workers bought stock in their employers when trading was less volatile, the study found.

Retail investing took off during the pandemic, partly spurred by trading app Robinhood Markets Inc (NASDAQ:), Reddit and other social media sites. So-called “meme stocks,” such as movie theatre company AMC Entertainment (NYSE:) Holdings Inc and videogame retailer GameStop Corp (NYSE:), saw shares gain more than 1,000% this year due to mom-and-pop investors.

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