4 ms·

In no way do I speak for my employer, but on a personal level, this has been amazing for me and I'm so grateful the company did this. I'm very conservative abo

by mabbo 4y ago

In no way do I speak for my employer, but on a personal level, this has been amazing for me and I'm so grateful the company did this. I'm very conservative about investing, and don't want to have a large amount of my portfolio tied up in the company I work for. I'm maxed out on cash (there's a minimum equity portion at my level) and my additional income goes into a broader portfolio of investments.

maerF0x0 4y ago
Its a very efficient thing for them to do too if ultimately you're just going to sell all and then reinvest. Ideally they would have started this program at a high stock price, but now better than never.
MEMORYC_RRUPTED 4y ago
Same here. It's also nice that I happen to live in a country that gives a tax break on your (monetary, not stock) income, so that makes the choice for money even easier. Reinvest it in an index fund, and forget about it. Yeah, I might miss out on significant gains, but I might also not. Less risk for a reasonable yield.
duxup 4y ago
>don't want to have a large amount of my portfolio tied up in the company I work for. Just before the .com bust a company I worked for decided to remove the option for employees to just dump their 401k contributions into company stock, and removed the option to direct a massive % of their paycheck into the company stock purchase plan. (I believe some of these limits became law later on but at the time it was legal) Some folks got really upset by that. The argument at that time was "we don't to be a part of employees suddenly being broke if things go south". About a year later they were right, things went south. Our stock did sorta well in the long term (not great short term of course), but IMO it was a good choice.
- mabbo 4y ago
  This is a large part of why I feel this way. I grew up near Ottawa, and had a lot of friends whose parents worked at Nortel. They were compensated with a lot of stock, which they held onto (it keeps rising, after all). Their pension plan was mostly invested in the company stock too. When the company fell apart (let's set aside whose fault that is- different topic), they lost their jobs, their savings, their pensions, in their 40s and early 50s mostly.
  - duxup 4y ago
    Yeah I knew some folks at the time (.com days) who had life changing type money in company stock and they were able to sell a good portion of it at will. They didn't sell... it did not work out for them. To this day I don't get why they didn't sell at least say $1million and stash it someplace. Sure let the rest ride if you want to do that but man save some. I never asked them about it after their company tanked, I imagine they don't want to think about it.
    - bombcar 4y ago
      People can feel it’s “disloyal”. So keep some but don’t keep all!
  - AYBABTME 4y ago
    It boggles my mind when people vest RSUs and just leave them there, hold onto their employers' stock and don't sell & diversify. The RSU vesting day is equivalent to having bought the stock on that day, there's no tax advantage to holding onto it. Whether at SHOP or at AMZN/MSFT/GOOG, why keep all your eggs in the same basket? And yet the average person does exactly that.
    - dehrmann 4y ago
      https://en.wikipedia.org/wiki/Endowment_effect https://en.wikipedia.org/wiki/Endowment_effect
    - Macha 4y ago
      Yeah, even if I think my company will do well, having a large part of my net worth tied up in stock of my employer always feels a bit of an "eggs in one basket" scenario - if something happens to majorly impact the stock value, there's a decent change it will consequently impact my job security.
- gadders 4y ago
  It's 14 years since Lehmans went bust. Plenty of people there lost their wage and their investments (in Lehmans stock) when the company went under. Stock options can be great, but you need to be aware of the concentration risk.
- mym1990 4y ago
  Isn't one benefit of these programs(from the employer side) that employees are more directly tied to company outcomes, and thus will put out better work/product? Of course one person won't shift the stock price, but as a collective, over time, it certainly would.
  - duxup 4y ago
    I think it is, but the question is how much of an incentive do you want (some) but maybe not overwhelming incentive where a bad quarter is completely demoralizing or worse...
  - JAlexoid 4y ago
    That's just unsubstantiated claim.
    - mym1990 4y ago
      Hence the wondering part, I personally have never been in such a structure, so I don't have first hand experience. BUT from everything that I have read, extrinsic motivation such as "work harder so your company does better so your stock goes up" doesn't seem like it would really hold up for too long.

by mabbo 4y ago

maerF0x0 4y ago

Its a very efficient thing for them to do too if ultimately you're just going to sell all and then reinvest. Ideally they would have started this program at a high stock price, but now better than never.

MEMORYC_RRUPTED 4y ago

Same here. It's also nice that I happen to live in a country that gives a tax break on your (monetary, not stock) income, so that makes the choice for money even easier. Reinvest it in an index fund, and forget about it. Yeah, I might miss out on significant gains, but I might also not. Less risk for a reasonable yield.

duxup 4y ago

>don't want to have a large amount of my portfolio tied up in the company I work for. Just before the .com bust a company I worked for decided to remove the option for employees to just dump their 401k contributions into company stock, and removed the option to direct a massive % of their paycheck into the company stock purchase plan. (I believe some of these limits became law later on but at the time it was legal) Some folks got really upset by that. The argument at that time was "we don't to be a part of employees suddenly being broke if things go south". About a year later they were right, things went south. Our stock did sorta well in the long term (not great short term of course), but IMO it was a good choice.

mabbo 4y ago
This is a large part of why I feel this way. I grew up near Ottawa, and had a lot of friends whose parents worked at Nortel. They were compensated with a lot of stock, which they held onto (it keeps rising, after all). Their pension plan was mostly invested in the company stock too. When the company fell apart (let's set aside whose fault that is- different topic), they lost their jobs, their savings, their pensions, in their 40s and early 50s mostly.
- duxup 4y ago
  Yeah I knew some folks at the time (.com days) who had life changing type money in company stock and they were able to sell a good portion of it at will. They didn't sell... it did not work out for them. To this day I don't get why they didn't sell at least say $1million and stash it someplace. Sure let the rest ride if you want to do that but man save some. I never asked them about it after their company tanked, I imagine they don't want to think about it.
  - bombcar 4y ago
    People can feel it’s “disloyal”. So keep some but don’t keep all!
- AYBABTME 4y ago
  It boggles my mind when people vest RSUs and just leave them there, hold onto their employers' stock and don't sell & diversify. The RSU vesting day is equivalent to having bought the stock on that day, there's no tax advantage to holding onto it. Whether at SHOP or at AMZN/MSFT/GOOG, why keep all your eggs in the same basket? And yet the average person does exactly that.
  - dehrmann 4y ago
    https://en.wikipedia.org/wiki/Endowment_effect https://en.wikipedia.org/wiki/Endowment_effect
  - Macha 4y ago
    Yeah, even if I think my company will do well, having a large part of my net worth tied up in stock of my employer always feels a bit of an "eggs in one basket" scenario - if something happens to majorly impact the stock value, there's a decent change it will consequently impact my job security.
gadders 4y ago
It's 14 years since Lehmans went bust. Plenty of people there lost their wage and their investments (in Lehmans stock) when the company went under. Stock options can be great, but you need to be aware of the concentration risk.
mym1990 4y ago
Isn't one benefit of these programs(from the employer side) that employees are more directly tied to company outcomes, and thus will put out better work/product? Of course one person won't shift the stock price, but as a collective, over time, it certainly would.
- duxup 4y ago
  I think it is, but the question is how much of an incentive do you want (some) but maybe not overwhelming incentive where a bad quarter is completely demoralizing or worse...
- JAlexoid 4y ago
  That's just unsubstantiated claim.
  - mym1990 4y ago
    Hence the wondering part, I personally have never been in such a structure, so I don't have first hand experience. BUT from everything that I have read, extrinsic motivation such as "work harder so your company does better so your stock goes up" doesn't seem like it would really hold up for too long.