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Employee Stock Options?
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."
Mature companies like Microsoft have switched from options (who really thinks their stock will increase enough to make the options valueable?). Instead, they favor giving stock awards; basically like a bonus.
Large public companies mostly still have employee stock purchase plans, allowing employees to buy company stock for ~10% discount.
No, not the options themselves. But the whole fight about expensing options.
Options never needed to be expensed; any dilution from option grants shows up on the bottom line and any analyst with two brain cells to rub together can tell the difference between "earnings" and "fully diluted earnings"
But folks (including many people here) cried out in favor of expensing them, and in doing so, ensured that Mahogany Row (i.e. senior management and executives) is now the only part of the company has a realistic chance of getting an option-based lottery ticket, let alone winning with it.
If you're Warren Buffett or Bill Gates, that's just fine: less folks getting rich means more room at the top. If you're the government, that's also just fine: less chance of Joe Sixpack retiring early on a long-term capital gain (or effectively tax-free via an IRS section 83(b) election) means more tax dollars as restricted stock grants are taxed just like wages. If you're Joe Sixpack (or the Fred Winecase hiring them) and either of you are in the business of busting your balls to build something and motivate yourself and/or your employees, however, you're outa luck.
So be careful what you ask for -- because given half a chance, FASB will give it to you, and they'll give it to you good and hard.
My wife and I are having a hard time trying to decide on what kind of insurance to get. This is because of the $1,400.00 she is bringing home, almost $400.00 of that is presently going towards insurance.
After looking up insurance, sure you can get $200.00 med insurance, but then it has a $10,000.00 deductible on it! Since we pay out maybe $2,000.00 a year max for medical costs this doesn't make sense.
Actually, taking the large deductible insurance plan makes more sense than you think.
Based upon the number that you give, you are presently paying $4800/yr in health insurance, which I assume has some nominal deductible or copayment. This means that you probably are paying, say, about around $5000/yr for health care (insurance plus out-of-pocket).
If you took the high deductible health insurance, you would end up paying $2400/yr for the insurance plus around $2000 out of pocket for medical costs. In total, you would be paying only $4400/yr for health care.
Of course, you would be taking somewhat of a gamble that you and your wife aren't going to need something major, but you can hedge against this by putting the $600/yr difference in the bank each year to cover yourself for a rainy day.
The whole point of insurance is to handle catastrophic losses. However, it seems as if our current health insurance system isn't really insurance in the traditional sense. Heath insurance covers every little thing with minimal out of pocket expense.
Most doctor's visits cost in the hundreds of dollars, which may sound like a lot, but if you factor in the cost of health insurance, I would almost rather just pay the expense myself and save the insurance for the things that I wouldnt be able to pay, like open heart surgery. With the way insurance premiums are, it seems like I would come out ahead that way.
Plus, I would be able to see whatever doctor I wanted instead of being limited to "the network". Since I am paying my own way, I would have more flexibility to be a good consumer, rather than relying on the insurance company to be a good consumer for me.
My fix to the health care system would be to offer catastrophic health insurance coverage (~$3000 deductible) for lower premiums, and then allow people to put money into a Medical Spending Account on a tax deductible basis to cover medical expenses. For the working poor, I would offer some tax credits to defer the cost of the insurance and to help fund their MSA's. Then people would have maximum choice while still having the insurance coverage in case they are hit by a car or something.
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www.moneybythenumbers.com
Options ARE NOT, ARE NOT grants.
Grants are GIFTS of stock outright. Options are the odds that the stock will sell at a lower price than the strike price when you exercise them.
EVERY single person I know is underwater on their options. Every Single One.
Options are essentially worthless in this market for the forseeable future. They were a useful tool to attract people by offering them a great deal of other peoples's money in the future.