4 ms·

Maybe Wall Street is made up of "grunts" who understand the value of cash and properly discounts the promise of paper profits later! That said, like earlier po

Maybe Wall Street is made up of "grunts" who understand the value of cash and properly discounts the promise of paper profits later! That said, like earlier posters I can only budget around my base salary. I would of course prefer that "guaranteed" bonuses come in the form of base comp paid every check. If you want to incentivize me to create shareholder value and stick around; offer a generous ESPP.

tcoppi 12y ago
Personally I wouldn't use an ESPP at all. You've already got your current job invested in the company, why would you want to put more eggs into that basket?
- Iftheshoefits 12y ago
  Depends on the ESPP, no? The one ESPP I had was pretty nice: the shares were offered at a (double-digit, percentage wise) discount of the lowest share price at either the beginning or end of the purchase period. That effectively guaranteed a profit of at least the discount (more or less).
- pcl 12y ago
  If you have the free cash to tie up in an ESPP, I generally think they are worth doing. They usually let you buy shares at a 15% or so discount of the lower of the price on the vesting date, or the price on the initial offer date. This is typically over either a 2-year or 6-month look-back period, although I've seen other time periods as well. Some programs even let you automate that automatic-sell rule. So... if you're playing it conservatively, you can just sell the shares on the day that they are granted to you, thus realizing a guaranteed 15% increase on whatever percentage of your salary you can put in the program. There is some risk that if the company goes bankrupt, you could lose the amount invested. But I'd guess that ESPP programs are pretty senior in the debt pool, and generally management doesn't want to piss off its employees any more then absolutely necessary during a bankruptcy proceeding.

tcoppi 12y ago

Personally I wouldn't use an ESPP at all. You've already got your current job invested in the company, why would you want to put more eggs into that basket?

Iftheshoefits 12y ago
Depends on the ESPP, no? The one ESPP I had was pretty nice: the shares were offered at a (double-digit, percentage wise) discount of the lowest share price at either the beginning or end of the purchase period. That effectively guaranteed a profit of at least the discount (more or less).
pcl 12y ago
If you have the free cash to tie up in an ESPP, I generally think they are worth doing. They usually let you buy shares at a 15% or so discount of the lower of the price on the vesting date, or the price on the initial offer date. This is typically over either a 2-year or 6-month look-back period, although I've seen other time periods as well. Some programs even let you automate that automatic-sell rule. So... if you're playing it conservatively, you can just sell the shares on the day that they are granted to you, thus realizing a guaranteed 15% increase on whatever percentage of your salary you can put in the program. There is some risk that if the company goes bankrupt, you could lose the amount invested. But I'd guess that ESPP programs are pretty senior in the debt pool, and generally management doesn't want to piss off its employees any more then absolutely necessary during a bankruptcy proceeding.