Intuitive Surgical Employee Stock Purchase Plan

Intuitive Surgical offers a tax-qualified employee stock purchase plan under IRC Section 423. The plan lets eligible employees buy Intuitive Surgical stock at a 15.00% discount, and applies a 24-month lookback that prices the purchase off the lower of the start or end price. It runs on 24-month offering periods and allows contributions of up to 15.00% of pay.

Plan at a glance

Discount
15%
off the purchase price
Lookback
24 mo
lower of start or end price
Offering period
24 mo
4 purchases per offering
Contribution cap
15%
of pay, up to $25,000/yr

Plan details

Plan nameAmended and Restated Intuitive Surgical, Inc. 2000 Employee Stock Purchase Plan
Effective dateApril 25, 2024
Section 423 qualifiedYes -- tax-qualified under IRC Section 423
EligibilityEmployees customarily employed more than 20 hours per week and more than 5 months in a calendar year; not 5% stockholders of the Company
Industry segmentPharma & Medical

Note: 24-month offering periods divided into four 6-month purchase periods; purchase price is lower of 85% of FMV on offering date or 85% of FMV on purchase date; reset provision if FMV on first or last day of purchase period falls below offering date price; up to 15% of eligible compensation; April 2024 amendment and restatement approved by shareholders increased share pool

What this means for you

How enrollment works

Most ESPPs are funded through after-tax payroll deductions during an enrollment window. You choose a percentage of pay to set aside, and on the purchase date the plan buys shares on your behalf -- at a discount, and with a lookback if the plan offers one. The discount and lookback are what make an ESPP different from simply buying shares on the open market.

Hold versus sell

After shares are purchased, participants generally face a choice between selling soon after purchase or holding for a longer period. Selling quickly locks in the built-in discount but concentrates the proceeds in a single stock for less time; holding longer can change the tax treatment but adds exposure to that one company's share price. Which path makes sense depends on your overall financial picture, not on the plan terms alone.

Tax treatment, in general

For Section 423-qualified plans, the discount and any gain are taxed differently depending on how long you hold the shares -- a "qualifying disposition" (holding past statutory periods) versus a "disqualifying disposition" (selling sooner) are taxed in different ways. Non-qualified plans follow different rules. This is general educational information, not tax advice; the IRS rules are specific and your own situation determines the outcome.

Talk it through
Not sure how your ESPP fits the rest of your plan?

ESPP decisions touch your cash flow, your concentration in a single stock, and your taxes. If you'd like to think it through with someone, you can schedule a free, no-obligation conversation.

Talk to an advisor

Plan terms sourced from https://www.sec.gov/Archives/edgar/data/0001035267/000103526724000171/ex-102xamendedandrestated2.htm. Last updated June 12, 2026.

This page is for educational purposes only and does not constitute investment, tax, or legal advice, nor a recommendation to buy or sell any security. Employee stock purchase plan terms are drawn from public filings and plan documents and may be incomplete or out of date. You may consider consulting a qualified professional and confirming all details with your plan administrator before making decisions. Waterfall Planning is not affiliated with Intuitive Surgical.