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"Pay Mix" update...
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<blockquote data-quote="Throwaway9" data-source="post: 5457285" data-attributes="member: 103247"><p>Let me know if I'm thinking about this correctly.</p><p></p><p>This is a hypothetical scenario where two Managers both make $100,000/year and are eligible for 3% OIP, and were hired before 2008. The only difference in these Managers is that one owns no UPS A stock on 12/1/22 and the other holds $280,000 worth (based on the Jan 1-Dec 1, 2022 average stock price). I'm using $280,000 because that is the amount necessary to get the full OIP Award and thus maxes out their salary increase ($280,000 x 3%= $8400).</p><p></p><table style='width: 100%'><tr><td><strong>Current Salary per Year</strong></td><td><strong>Current Salary per Month</strong></td><td><strong>Stock Ownership Amount on Dec 1, 2022</strong></td><td><strong>New Salary 2023</strong></td><td><strong>MIP Award 2023 (20%)</strong></td><td><strong>Pension Offset in 2023 (13%)</strong></td><td><strong>Total</strong></td></tr><tr><td>$100,000</td><td>$8,333</td><td>$0</td><td>$111,000</td><td>$22,200</td><td>$14,430</td><td>$147,630</td></tr><tr><td>$100,000</td><td>$8,333</td><td>$280,000</td><td>$119,333</td><td>$23,867</td><td>$15,513</td><td>$158,713</td></tr><tr><td></td><td></td><td><strong><span style="color: rgb(65, 168, 95)">Difference</span></strong></td><td><strong><span style="color: rgb(65, 168, 95)">$8,333</span></strong></td><td><strong><span style="color: rgb(65, 168, 95)">$1,667</span></strong></td><td><strong><span style="color: rgb(65, 168, 95)">$1,083</span></strong></td><td><strong><span style="color: rgb(65, 168, 95)">$11,083</span></strong></td></tr></table><p></p><p>So, all other things being equal, the difference between maxing out the one time OIP salary adjustment is $11,000 in the first year. Each year after that (again, all other things being equal), the number gets larger. In 2028, the Pension Offset becomes 15%, so that number grows a bit too. </p><p>So if Manager #2 stays with the company for 10 more years until they retire, they will make at least $110,000 more than Manager #1 would, all other things equal. Manager #1 is essentially buying an $11,000/year raise for a $280,000 short term investment, as that Manager could sell all the stock on Dec 2 and still lock in the raise. Of course, that Manager will probably hold onto the stock until Dec 31, 2022 to get the 2022 OIP Award of $8,333.</p><p></p><p>Is this right? Am I missing something?</p></blockquote><p></p>
[QUOTE="Throwaway9, post: 5457285, member: 103247"] Let me know if I'm thinking about this correctly. This is a hypothetical scenario where two Managers both make $100,000/year and are eligible for 3% OIP, and were hired before 2008. The only difference in these Managers is that one owns no UPS A stock on 12/1/22 and the other holds $280,000 worth (based on the Jan 1-Dec 1, 2022 average stock price). I'm using $280,000 because that is the amount necessary to get the full OIP Award and thus maxes out their salary increase ($280,000 x 3%= $8400). [TABLE] [TR] [TD][B]Current Salary per Year[/B][/TD] [TD][B]Current Salary per Month[/B][/TD] [TD][B]Stock Ownership Amount on Dec 1, 2022[/B][/TD] [TD][B]New Salary 2023[/B][/TD] [TD][B]MIP Award 2023 (20%)[/B][/TD] [TD][B]Pension Offset in 2023 (13%)[/B][/TD] [TD][B]Total[/B][/TD] [/TR] [TR] [TD]$100,000[/TD] [TD]$8,333[/TD] [TD]$0[/TD] [TD]$111,000[/TD] [TD]$22,200[/TD] [TD]$14,430[/TD] [TD]$147,630[/TD] [/TR] [TR] [TD]$100,000[/TD] [TD]$8,333[/TD] [TD]$280,000[/TD] [TD]$119,333[/TD] [TD]$23,867[/TD] [TD]$15,513[/TD] [TD]$158,713[/TD] [/TR] [TR] [TD][/TD] [TD][/TD] [TD][B][COLOR=rgb(65, 168, 95)]Difference[/COLOR][/B][/TD] [TD][B][COLOR=rgb(65, 168, 95)]$8,333[/COLOR][/B][/TD] [TD][B][COLOR=rgb(65, 168, 95)]$1,667[/COLOR][/B][/TD] [TD][B][COLOR=rgb(65, 168, 95)]$1,083[/COLOR][/B][/TD] [TD][B][COLOR=rgb(65, 168, 95)]$11,083[/COLOR][/B][/TD] [/TR] [/TABLE] So, all other things being equal, the difference between maxing out the one time OIP salary adjustment is $11,000 in the first year. Each year after that (again, all other things being equal), the number gets larger. In 2028, the Pension Offset becomes 15%, so that number grows a bit too. So if Manager #2 stays with the company for 10 more years until they retire, they will make at least $110,000 more than Manager #1 would, all other things equal. Manager #1 is essentially buying an $11,000/year raise for a $280,000 short term investment, as that Manager could sell all the stock on Dec 2 and still lock in the raise. Of course, that Manager will probably hold onto the stock until Dec 31, 2022 to get the 2022 OIP Award of $8,333. Is this right? Am I missing something? [/QUOTE]
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