Incoherent mumblings about stock grants
Yesterday was the first vesting date for my company’s deferred stock program. I’m now the proud owner of 38 shares of stock. Woo hoo. It would have been 62 shares if I had bothered to come up with the money to pay the payroll taxes associated with the grant, which I really should have done. But I let my attitude toward my job and my company influence my decision. Instead I let them use some of the shares to settle the tax liability. Don’t make my mistake if you think your company’s stock will go up—I have given up potential upside on a few shares in order to satisfy the tax bill today.
If I thought the stock would inrease significantly over the next few years I probably would have ponied up the money for taxes. I guess the paltry amount of the grant influenced my decision as well. The company did away with granting stock options two years ago and began the deferred stock program. I can see where having several years’ worth of grants vesting can make this a nice little annuity-like program. Next January, for instance, I would have over 200 shares vesting since it would be from two years worth of grants.
So I guess I should be grateful, but looking at the numbers right now it is hard to get excited. Especially when compared to the numbers of stock options: right now I have 4,000 options, but half of them are so far under water they need a bathyscaphe to keep from getting crushed. I was fortunate to exercise the options I did when the stock was climbing, which I did in order to get a sizeable down payment on our house.
Sorry if the post comes off as unappreciative, as the company has been very good to me for the time I’ve been here. They don’t have to have the program, although it would be hard to be competitive for personnel in this environment without something of the sort.
I just don’t see the wealth-building potential from the deferred stock program that I experienced from the option grants, and a large part of my dissatisfaction comes from the change in programs (thanks FASB and Congress!). Also the fact that vesting is now a taxable event, which was not the case with options. So my net worth went up about $600 yesterday (after tax) and I’ll count that.
If I thought the stock would inrease significantly over the next few years I probably would have ponied up the money for taxes. I guess the paltry amount of the grant influenced my decision as well. The company did away with granting stock options two years ago and began the deferred stock program. I can see where having several years’ worth of grants vesting can make this a nice little annuity-like program. Next January, for instance, I would have over 200 shares vesting since it would be from two years worth of grants.
So I guess I should be grateful, but looking at the numbers right now it is hard to get excited. Especially when compared to the numbers of stock options: right now I have 4,000 options, but half of them are so far under water they need a bathyscaphe to keep from getting crushed. I was fortunate to exercise the options I did when the stock was climbing, which I did in order to get a sizeable down payment on our house.
Sorry if the post comes off as unappreciative, as the company has been very good to me for the time I’ve been here. They don’t have to have the program, although it would be hard to be competitive for personnel in this environment without something of the sort.
I just don’t see the wealth-building potential from the deferred stock program that I experienced from the option grants, and a large part of my dissatisfaction comes from the change in programs (thanks FASB and Congress!). Also the fact that vesting is now a taxable event, which was not the case with options. So my net worth went up about $600 yesterday (after tax) and I’ll count that.
posted by Dwight at
9:00 AM
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