A publically traded Canadian corporation provides employees with one year of continuous service and the opportunity to place 6% of their pre-tax income in a plan that may be invested in the company's stock. Furthermore, the company matches the shares by 50% up to a limit of 4% of the employees' pre-tax income. From the perspective of the employee, what are the potential drawbacks of participating in this program?

Question

Quizplus · Accepted Answer

The potential drawback of participating in this program is that if the company does poorly, the employee's job and savings may be at risk. This is because a significant portion of the employee's investment is tied to the company's stock performance. Other potential drawbacks, such as administrative costs or tax burdens, are not mentioned or implied in the passage.

A Publically Traded Canadian Corporation Provides Employees with One Year