Employee Stock Options? 358
Evil Butters asks: "ComputerWorld has an interesting article regarding the decline of Employee Stock Options. Long gone are the days when companies would pass out stock options like toilet paper (as you were lucky if it was worth as much). Since most of us are probably in IT related fields, is anyone seeing any turn-around in compensation packages -- especially for IT folk? Everywhere I look, companies are still cutting back and finding reasons why compensation does not need to be increased (except for CEO's of course) no matter what your performance is like. But according to the article, 54% of the top S&P 250 companies are (at least) using restricted stock as performance perks, etc."
One DNF in hand is better than two pre-ordered (Score:5, Interesting)
My preferred compensation is profit-based bonus. So if a company is making profit, employees share the pie, it's like dividends to shareholders except you hold your "shares" in the form of employment/position.
My company's doing an incremental performance bonus, so if this month's profit is up compared to previous month, you get some money added in the bonus pot, and the size of bonus depends on the % increase. This is ideal for employers because it ensures growth, but employees could be working just as good for 5 years in a row, but with the last 4 years without bonus.
Please.. (Score:5, Interesting)
Do we need to go back to Economics 101 ??
When there are more people than jobs, they don't have to pay you what you're worth, because there's someone out there, probably equally or more qualified, willing to work for a lot less.
The days of being overcompensated are over. Count your blessings if you're paid market average (which no longer includes options). Don't like it? Start your own company.
You didn't have to expense tiolet paper (Score:2, Interesting)
Rent deposits for Bay Area landlords... (Score:4, Interesting)
I wonder if they are still making such demands?
My company does it (Score:3, Interesting)
Personally I'd rather just get a straight bonus than something of dubious value like stock. To me an RHCE isn't so much a marketable item than a validation of a person's skill set (flame suit on!)
Offered to me a few weeks ago (Score:5, Interesting)
Anyway, they've rung me up several times since - I suspect as new rounds of funding come through - and their last offer to me included good old stock options as an incentive. They're planning to go public in the next year or so, and wanted me to sign on now for the promise of wealth beyond my wildest dreams at some unspecified future date.
It was like being in a time warp, and gave me a bit of a chuckle; unfortunately these days I'm not really interested in working for a small salary while having the promise of a huge payday dangled over my head at some vague date that's somewhat out of my control.
Makes sense from the company's perspective (Score:5, Interesting)
Just as companies had to give in on a lot of employee demands back when you could flip jobs as easily as a hamburger, once the boom was over they had control again. And if there's one thing you can count on in life, a company with control will use it:
"Many of these companies, looking for ways to reward service or pay executives their just perks, are favoring restricted stock, according to a study released last month. Restricted stock comes in a number of forms and with different names, but all versions require continued service by the employee. Stocks or cash tied to business performance are gaining prominence."
Yup, it's the old 'performance' game. "Sorry, Smithers, you did good work, but the market hit us hard this year so your bonus will consist of this Burger King coupon and a pack of Doritos. Good job, son." When companies can tie things to performance, it's good for the company. No random stock giveways so that even the slackers cash out while the company isn't making a dime. Now if the company does well, you can do well, unless you're poor Smithers.
"A U.S. accounting standard that requires companies to book stock options as an expense is expected to be made final before the end of the year by the Financial Accounting Standards Board (FASB). "
Aha! The other reason! Yeppers, one other immutable law of nature: A company will never do anything that costs them money. Everything they do, even the seemingly nice things, is designed to make them money. So stock options are costing them more? Buh-bye stock options.
Left a job over compesation (Score:4, Interesting)
This all got worse as the company did worse and worse, and its stock slipped under a buck. Not only did the company not offer stock options, no one would have touched them anyway. The real kicker was that we had not seen a raise in three years, but we had seen several CEO's (6, I think) get hired, serve for a short bit and then be let go with a generous severance package. In the end, the company did a re-organization and tried to get the Customer Support and Integration departments to move to San Antonio, Texas (I live in Southern California), with the exception of the least trained tech, everyone told them, "hell, no". As for myself, they offered me a somewhat ambigious position in the Engineering department, which was to stay in So. Cal. I was to do software testing and development (at a very basic level), support the local network, and whatever else they threw my way. Oh, and I would have to field support calls that the utterly untrained staff in San Antonio couldn't handle (a.k.a. all of them). I was told that I would get some sort of raise out of this, but for 4 months running, and right down to the last month before the re-organization was finalized, no one could give me any sort of number. So, I found a job elsewhere. I started at a higher pay, by a pretty good jump, the stress is way, way, way lower, and I actually enjoy what I am doing. Plus, the prospect of regular raises are much higher.
In all, the IT sector is still alive and kicking, you just have to keep trying; and don't be afraid to tell your current company to go fuck itself.
Stock Options Can be a Good Thing (Score:5, Interesting)
Could've.
Back in late 2000 it ran all the way up to 40-something, rung the bell, and then cratered. The whole time I made the mistake of holding onto them out of some odd form of loyalty.
My biggest tip to those that have them, DO NOT hesitate to excercise them when the stock runs up. A sunnier day might come, it might not.
As it stood, when I was laid off my options were underwater and not worth the paper they were printed on. I've since lost them, but last I checked they were still underwater.
Easy come, easy go. I would not take them instead of a hard raise.
Employee Stock Purchase Plan instead (Score:4, Interesting)
Stock Options are Bullshit (Score:3, Interesting)
But what to do when a company is offering stock options? Since I'm looking for work, I just not and smile, rather than give them a piece of my mind.
Then again, it has been a while since I went on an interview. BRB, gotta send out another couple thousand job applications... I track and rate the recruiters I contact [zhrodague.net], shouldn't you?
Re:Just got a raise - sort of (Score:1, Interesting)
Incentive Structures (Score:5, Interesting)
It is notably different from most engineering in that the products do not require large capital to distribute, once the creativity is complete.
In this manner, I have often wondered if programmers would work better in limited liability partnerships rather than corporations. A small group of programmers who produce on contract to corporations would be, if well organized, very valuable.
The corporate structure lends itself to growth in traditional economy, whereas a larger programming companies have, in my limited experience, not been efficient. There are exceptions, like Electronic Arts, I think.
But the hierarchical view of corporations, looking down upon employees, is flawed in the programming world because the direction of the company is often better felt by the programmers themselves, and management has often had a terrible disconnect from the technical reality, and a tendency to dictate where they should listen. Good management isn't necessarily this way, but many people cling to this management style.
In a partnership, the partners would be responsible for bringing in clients, the design, the programming, and the effective reuse of code. In a corporation, they are typically responsible only for the programming. I believe savvy programmers would be much better at selecting appropriate clients and choosing the direction of the code. I believe, when it comes to the effective reuse of code, a partnership would have better structures adopted to accommodate it.
This sort of delegation among partners has been very effective, in my opinion, in lawyer partnerships. I believe the effectiveness could translate into programmer partnerships. Mind you, moving programmers into management positions in companies may have the same effect, but I think the hierarchial structure inherently causes problems. The distinguishing feature being that in a partnership, management would also be programmers, and vise versa. There wouldn't just be a "delegation to programmers" by management, so to speak.
Just food for thought.
Beware of the 83(b) election! (Score:5, Interesting)
As one of many who briefly had a small fortune in stock options in the late '90s, I can tell you from experience:
Careful What You Wish For (Score:2, Interesting)
Re:Careful what you ask for... (Score:3, Interesting)
And just to add another data point, my employer grants options to about 30% of all employees each year based on individual performance. The number of options vary based on your position and performance level. Since the economy has improved, they've also started offering cash bonuses again to go along with the options. As with options, cash bonuses vary based on position and job performance.
A soggy deal (Score:3, Interesting)
The last company I worked for gave stock options in leiu of higher salary. It turned out to be a soggy deal. Several of the ranking officers of the company were indicted on charges of industrial espionage and theft of trade secrets after raids on the corporate headquareters turned up source code they'd stolen from their former employer, a competitor. This and subsequent court rulings and announcements sent the stock on a wild rollercoaster ride. The situation for employees was made even worse by the onerous restrictions placed on the sale of stock which included requiring employees to use a company designated broker, thereby giving the company an effective pinchpoint to prevent lots of shares being sold at once. After frustrating rounds of phone tag, many gave up. Another restriction was a "blackout" period when sales were prohibited. These were 3 week time windows centered on the announcement of quarterly earnings.
When I left, I was vested for about 1000 shares and had options on 700 more. But they were underwater and stayed that way until the options expired. Finally, the restriction to use their broker was lifted and I handed the certificates to my broker who sold them after a favorable court ruling caused the price to spike. I bagged $8k after taxes, chump change considering all the 60 hour weeks I'd put in there.
I worked another place that gave large cash bonuses. It was a small place with spartan benefits. You had to pay 1/2 your health insurance, for example. This bonus was based on how well the company did that year and the president's perception of your contribution. This created some interesting office politics. One miscue on your part, spotlighted by "concrened" coworkers might overshadow a whole year's worth of solid performance. Then there's the tax bite. Chawmp! It ain't like havin' a 401k. another disadvantage is that if you leave, you don't get a pro-rated portion of that year's bonus. At least the options are portable.
Both stock options and lump sum bonuses lean on you. When much is "given", much is expected. But in each case there is too much stick and not enough carrot. I prefer a competitive wage and a 401k to options and large lump sum bonuses.
Speaking of CEOs... (Score:3, Interesting)
What company was it, recently (in the news), where the CEO was hired, "led" the company for 18 months, the board fired him, but gave him a HUGE severance package - upwards of 100+ million - that got the stockholders of the company in a tizzy and now they are suing the board (and the former CEO, maybe)?
I'll tell you what - let me run your company - any company. I certainly can't do any worse than any of these other bozo's - hell, I bet I could do better. You can even have me at a bargain: make my salary $75,000 a year, and if I don't do good after a year, cut me loose with a $2 million severance package.
Hell, that has to be a bargain - come on - someone out there needs a CEO, and I am serious!!! I will run your company, and you get my services cheap.
It galls me - that someone can run a company into the ground over 18 months and be cut loose with a severance package that will dwarf my total lifetime earning potential. Idiots making bank - what kind of screwed up crazy world is this?
college socialism (Score:3, Interesting)
Re:Careful what you ask for... (Score:3, Interesting)
http://www.j-bradford-delong.net/movable_type/20 03_archives/000668.html