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HR Magazine, August 2003 - Compensation

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HR Magazine, August 2003

Vol. 46, No. 8

Out of Options

Do all the equity vehicles available these days have you dazed and confused? Try a three-tiered plan to get the maximum juice out of your employee ownership programs, suggests The Beyster Institutes Martin Staubus. The components:

TIER ONE. A base layer that gets everyone involved, so all employees have a stake, even a modest one, in the future success of the company, says Staubus. Possible vehicles: Employee stock ownership plans, stock grants and matching 401(k) contributions in company stock.

TIER TWO. An investment level where employees have the opportunity to add to their stake, if theyre ready to put their own money behind it, says Staubus. Possible vehicles: employee stock purchase plans, stock purchase arrangements and company stock as an investment option in the 401(k) program.

TIER THREE. The performance tier, which gives you the flexibility to dole out a larger ownership interest to standout performers. The people responsible for creating value get a larger piece of what theyve created, says Staubus. Possible vehicles: stock options and performance shares.

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