In an effort to empower their workforce and extend the benefits of stock ownership, retail giant Walmart and popular fast-food chain Chipotle are implementing stock splits for the first time in decades and in their 30-year history, respectively.

Walmart's stock split, completed on February 26, saw a 3-for-1 split, making shares more accessible to employees. The company stated that the move was motivated by a desire to allow associates to feel that purchasing shares is within their reach. Chipotle's stock split is scheduled to take effect on June 26 and aims to achieve a similar goal.

Both companies recognize the importance of employee stock ownership and are eager to create opportunities for their workforce to invest in the company's success. They are offering employee stock purchase plans (ESPPs) and financial education to encourage greater participation. However, benefits consultants warn that simply splitting stocks may not be sufficient to drive widespread employee engagement.

While a stock split enables employees to purchase shares at a lower price, other factors come into play. Access to robust financial education, the promotion of ESPPs, and managing competing financial interests among employees are crucial aspects to consider when encouraging stock ownership. Many workers struggle to make ends meet, and everyday expenses often strain their finances, making it difficult to participate in stock programs.

Experts emphasize the importance of providing comprehensive financial education alongside stock ownership initiatives. Companies that embed ESPPs in their culture and invest in financial literacy programs tend to have higher participation rates among employees. Without proper education, the benefits of stock ownership may go unnoticed or underutilized.

Walmart and Chipotle have taken steps toward financial education. Walmart offers free online financial literacy courses through a partnership with Khan Academy, while Chipotle has partnered with SoFi to provide a financial well-being education platform. Ensuring employees understand the implications and benefits of company stock programs while also addressing their immediate financial needs is critical to increasing participation.

However, benefits consultants caution that investing in company stock should not be the sole focus for employees. Prioritizing day-to-day expenses, paying rent, and ensuring food security should take precedence. Experts suggest that diversifying investments by purchasing low-cost index funds or saving for retirement should also be considered alongside stock ownership.

To further incentivize employee stock ownership, companies can explore enhancements such as offering larger discounts on ESPPs, extending the lookback period to allow employees to take advantage of lower stock prices, or providing equity awards as part of employees' compensation packages. These additional initiatives can help drive greater participation while considering the financial implications for the company.

As Walmart and Chipotle strive to extend stock ownership to their employees through stock splits and comprehensive financial education, the success of these efforts will depend on creating a culture that emphasizes the long-term benefits of stock ownership and addresses immediate financial challenges.