Current Events > ok how the hell do company stock plans work?

(+) Yeah! (+)

I've worked at my current company ~9 months but neglected registering for their stock plan thing because I don't know how shit works and i thought it would require effort

I finally signed up and then got an email saying I got a grant of 3600 shares. Looks like i get the first 900 starting next month, and then more throughout the next few years. The first 900 is worth almost $20k, is this just free money?? Can really I just sell this and get money whenever I want?? What do I do

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sounds like a long term incentive
how the fuck did you not pay attention to the awards you'll receive for working there?
contact HR jeez

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The Trent posted...

sounds like a long term incentive
how the fuck did you not pay attention to the awards you'll receive for working there?
contact HR jeez

Its my first job and after they said 6 figure salary and health benefits I went "holy shit" and didn't care about anything else, also the stock market is confusing. Ok I will see if HR has some documentation or something

[LFAQs-redacted-quote]

It does seem like I also have that option to buy discounted stock, but I haven't done anything yet and I think they gave me some shares anyway? What do you mean it wouldn't be the full 20k if I sold instantly?

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I never invest in company plans. Take the money and do something else with it.

"Oh we'll match your retirement fund"

"Oh yeah? I love the idea of putting money into something I can't touch until I'm 65. Here take my fucking ass car too!"

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you definitely need to reach out to HR and ask them for some resources to help you understand all the benefits available in your compensation plan
specifically ask them if they have something about the stock options and then ask as many questions as they'll tolerate
frame it as "first job i know nothing!" and they'll probably be pretty happy to help

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TeaMilk posted...

Its my first job

TeaMilk posted...

6 figure salary and health benefits

I hope thats in pesos.

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You need to read up on your plan and figure out what it is, we have no idea.

My husband gets 3 kinds of stock stuff at his company.

1. You can buy stock discounted every 6 months and then you own it and can sell it.

2. He gets stock options which is the ability to buy stock at a certain price (but he does not have to)

3. Stock grants. They give him some stock as his bonus each year.
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mattymad posted...

Normally you 'buy' them with your salary at a discount. So you'd still profit if you instantly sold them but it wouldn't be the full 20k

I say normally. That's how it's always been for me.

Same. How we did it in my old company:

- Put a % of your post-tax salary over the course of January 1 through June 31 into a fund.
- Between the closing day price on Jan 1 and June 31, whichever is lower, you then buy shares at a discount (for us, it was 7%)

For example, I shove $4000 into the fund. On Jan1 it cost $30/share. On Jun31 it cost $35/share. So only July1, I buy the shares at $27.90, and with my newly found ~143 shares, it's now valued at $5000 overnight.

It was basically free money between the 7% discount on the purchase price, combined with the fact that I get 6 month worth of income to invest on the cheaper of the two days.

From there, the standard recommendation is to only hold onto the shares until you can sell them as a long term capital gain, usually about two years. If you sell before this time, it's basically treated as standard income and is taxed at a higher rate. The rationale is that if your company goes belly-up, not only are you unemployed, your savings also take a nasty hit. Diversify.
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