Mixing income with investment can backfire. Investors generally do not want employment income. For a CCPC, a third option exists, i.e. employees can be receive shares with the tax on any deemed benefit being deferred until the time of disposition. But, the company may be in the same situation another year from now when new folks again enter the scene. The stock purchase plan offers the simplest solution for getting employees on board as investors.
Employees thus become, and are treated like, real investors for the long haul.
The way I see it, an employee stock ownership plan is a much better way of facilitating true equity participation. Options, under our current tax rules, discourage ownership and should be relied upon only on the income side of the equation. He is a former executive director of the BC Advanced Systems Institute and is chair of the Vancouver Enterprise Forum.