RSU

Discussion in 'UPS Partners' started by Six Sides, Jun 9, 2011.

  1. Six Sides

    Six Sides Member

    Five years ago RSU, s were started to hold half of our MIP each year. 20% to be released each year. As it was explained then this was to help in management turnover. Given what I have seen it did not help. When management employees retire the RSU, s are still held, thus taking five years to release all the stock. Does anyone know why the company would hold this stock after the employee has taken a normal retirement?
     
  2. j13501

    j13501 Member

    The RSUs did help the company because:
    1) They only paid out 20% of what was due to a management person in a given year, unlike the previous MIP plan, where a person got the right to receive all their stock when the MIP was awarded. It also allowed the company not to actually pay the entire money awarded until the 5 yr. period had passed, thus saving wages in the current fiscal years.
    2) If a management person quits, then they forfeit all the retained RSUs that they had coming to them. It helps retention, because there is financial pain (lost RSUs) that occurs with the decision to quit.

    In the past, most management people that were planning to quit would wait until December, get their MIP stock award, and then quit. Since they received all their stock, there was no loss in quitting. Now, if someone quits, they give up the retained RSUs. The company lost a management person, but gained not having to pay all the retained MIP. If management turnover is 5%, that's a substantial sum of money that is never paid out by UPS.

    The one exception made is management people that leave UPS by retirement. If there was not an exception for retirement, then the plan would not include any way for a person to actually receive all the money that they had earned. That's why the company continues to pay a retired management person their 20% a year during the first five years after retirement.
     
  3. Six Sides

    Six Sides Member

    As you said, earned, they earned it. I for one do not think a retired management person should have to wait an additional 5 years for what they earned while employed. The RSU’s should be released when a person retires. The value of UPS stock can have a wide range of movement over a 5 year period. As JG Wentworh says “It’s my money and I want it now”!
     
  4. FracusBrown

    FracusBrown Ponies and Planes

    All that is earned with RSUs is a conditional IOU. If you've been following along for the last 10 years or so, you may have noticed there have been numerous reductions in compensation. The latest being the switcharoo on the MIP to become payable the following year, cleverly timed as RSU recipients reach full payout levels.
     
  5. Monkey Butt

    Monkey Butt You can call me Chappy Staff Member

    I thank you and I am sure you are willing, just as I am, to delay this compensation to help make the stock look better to investors. :devil3:
     
  6. SignificantOwner

    SignificantOwner A Package Center Manager

     
  7. SignificantOwner

    SignificantOwner A Package Center Manager

    Money games and random initiatives...that crap doesn't create value.
     
  8. Europa

    Europa New Member

    RSUs are gone for people in International. IMIP is paid out in full. We have our legacy RSUs running down for another four years, but that's it.
     
  9. Casca

    Casca Member

    It must also be said that figuring inflation $4000 now is worth more than $4000 released over the next 5 years.....The Company also gets the investment benefit of unpaid portions of that $4000 over the same period of time. Its a legal shell game.
     
  10. Six Sides

    Six Sides Member

    This would be called our interest free loan to UPS.
     
  11. Casca

    Casca Member

    In this unsure economy I have no problem loaning money to the needy but I sure wish UPS had gone through the proper steps instead of extortion.