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UPS Partners
Redesigned mip
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<blockquote data-quote="upscorpis" data-source="post: 51885"><p>A couple of thoughts on this: </p><p> </p><p>had_enough has touched on something I view as a potential impetous for this change. The move to a public company was to have created a currency other than cash for acquisitions. The stock's performance to date has not made this currency extremely valuable. Perhaps this is a way to get folks focused on share price to induce it to rise and perhaps raise it's intrisic value for an acquisition too large for cash? Just a thought. I don't know it to be true. </p><p> </p><p>Yes, I too worry about unrealistic goals. I have to say though I don't expect that to occur intentionally. Something to consider when parsing the notes accompanying the presentation is the language used describing when the salary committee would intervene regarding the MIP award. Paraphrasing, the salary committee would <em> consider </em> a shortfall in the stated goals when setting the award. There was no mention of the salary committee being involved when the goals were eclipsed. This leads me to believe that if the goals were unintentionally unrealistic or something not under management control was the cause of a shortfall, then that would be considered before reducing the MIP factor. </p><p> </p><p>The new plan will reduce the number of A shares being sold. Folks that wanted cash and sell immediately will get some cash. The rest of their shares cannot be immediately sold. Folks that are selling A shares for diversification can now invest tax free in their 401k instead. </p><p> </p><p>The vesting over five years will help UPS retain talent as leaving for a higher up front salary will leave money on the table. Realize UPS does study management turnover trends (just like hourly turnover trends) and does things to address it. </p><p> </p><p>Since this presents a short window of extra cash, I wonder what the strategy is to use it. I expect it to be leveraged somehow.</p></blockquote><p></p>
[QUOTE="upscorpis, post: 51885"] A couple of thoughts on this: had_enough has touched on something I view as a potential impetous for this change. The move to a public company was to have created a currency other than cash for acquisitions. The stock's performance to date has not made this currency extremely valuable. Perhaps this is a way to get folks focused on share price to induce it to rise and perhaps raise it's intrisic value for an acquisition too large for cash? Just a thought. I don't know it to be true. Yes, I too worry about unrealistic goals. I have to say though I don't expect that to occur intentionally. Something to consider when parsing the notes accompanying the presentation is the language used describing when the salary committee would intervene regarding the MIP award. Paraphrasing, the salary committee would [i] consider [/i] a shortfall in the stated goals when setting the award. There was no mention of the salary committee being involved when the goals were eclipsed. This leads me to believe that if the goals were unintentionally unrealistic or something not under management control was the cause of a shortfall, then that would be considered before reducing the MIP factor. The new plan will reduce the number of A shares being sold. Folks that wanted cash and sell immediately will get some cash. The rest of their shares cannot be immediately sold. Folks that are selling A shares for diversification can now invest tax free in their 401k instead. The vesting over five years will help UPS retain talent as leaving for a higher up front salary will leave money on the table. Realize UPS does study management turnover trends (just like hourly turnover trends) and does things to address it. Since this presents a short window of extra cash, I wonder what the strategy is to use it. I expect it to be leveraged somehow. [/QUOTE]
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