Anyone ever had an insulting pay rise?

**Mark** · 17th October 2014, 12:25

Originally Posted by D-Type

How do options work?

I thought it was if the price goes up you have the option to buy shares at the old price. But if the share price goes down, you have the option of not buying.

Right. We had that when our company was taken over. The purchase value of the shared was less than the options, therefore if we'd cashed them in at that point, we'd have lost money.

Cashing them in is simply selling the right to someone else. Or is it buying at the old price and immediately selling at the new higher price? This year your option is worthless so you can't sell it and you don't want to buy your shares for more than the current market price. The only way you can owe the company money is if you foolishly opt to buy the shares anyway even though the price you pay is higher than market price.

But I could be wrong.

You have to buy them at the option price then you can either keep them, or immediately sell them. I have a few stock options in web.com but I have to wait 2 years before I can use those options, and if I leave the company I lose the options right.

Even so, I would expect it would be 'night out' sort of money rather than it forming any significant part of my salary.

**schmenke** · 20th October 2014, 16:12

Essentially the company grants me a loan of a number of shares at a set (“grant”) price. After 12 months (“vesting” period) I have the option to “exercise” the stocks, meaning I have three options:

1. I can purchase the shares from my company at the grant price and immediately sell them at the current (vested) price. This is of course assuming that the vested price is greater than the grant price. I would have to repay the company the loan and keep the difference as (taxable) income to me. This is the most popular option.

2. I have the option of not purchasing the shares and have the company hold them until a later time. This is what I've been doing, and is the obvious choice when the vest price is lower than the grant price. I can then choose to exercise the options at any time as long as, in my case, I do it within 7 years. The advantage here is that I can exercise at any time when I feel the stock price is favourable.

3. I can, after 12 months, purchase the shares outright from the company at the vest price and keep them as stocks in my personal portfolio. I would have to repay the company the initial loan though. The difference with option 1 here is that the stocks are mine and not held by the company.

**Jag_Warrior** · 27th October 2014, 17:47

When I was in automotive, yeah, I did once get a raise which I wasn't happy with, considering that my annual evaluation was high... and the CEO gave himself a helluva raise! But hey, a 60-something year old man with a 30-something mistress and a (soon-to-be) ex-wife has bills and legal expenses to pay. So I was fairly forgiving.

I got a restricted stock grant the next year (which would have more than made up for the short-fall... for years to come). I'd been there for ten years and had been happy. But things were changing. So I joined a new company the year after that, and none of my restricted shares vested. The new company set my salary at a level to make up for me losing my stock so I took the offer.

If business/economic conditions allow it, when/if I get a raise I'm not happy with, I immediately start updating my resume and finding out who will "love me" more. Once upon a time, I had a certain amount of loyalty to a particular company. I was happy & proud to work there. We were heavy CART sponsors, as well as other racing series. And they gave a good opportunity to move laterally and vertically... and learn about different facets of the business. But I'm not "young" anymore. These days, I have no loyalty to anyone but myself and my family. So I'm in it for the money now. Pay me or I'll find someone who will. No hard feelings.

**Malbec** · 28th October 2014, 19:35

Haven't had a pay rise in 3 years, but did have my pensions contribution involuntarily doubled during the same period for a less valuable payout at a later retirement date... does that count?

**Jag_Warrior** · 29th October 2014, 04:52

Originally Posted by Malbec

Haven't had a pay rise in 3 years, but did have my pensions contribution involuntarily doubled during the same period for a less valuable payout at a later retirement date... does that count?

Would you expand on that? They doubled your contribution, cut the payout and also pushed out your retirement date?

Let me ask you something... is a guy named Lewis Campbell running your company now? Does he run around in a private jet with a woman (his "assistant") about half his age - maybe he married her by now? At the same time he was cutting your benefits, did he increase his compensation package???

Run! Run now! Run fast!