Home
Forums
New posts
Search forums
What's new
New posts
Latest activity
Members
Current visitors
Log in
Register
What's new
Search
Search
Search titles only
By:
New posts
Search forums
Menu
Log in
Register
Install the app
Install
Home
Forums
Brown Cafe UPS Forum
UPS Discussions
LTIP for the CEO, COO & CFO
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="Black_6_Leader" data-source="post: 501542" data-attributes="member: 9413"><p></p><p> </p><p><em> In general the answer is yes for options, and NO for RSUs & RPUs.</em></p><p> </p><p>In the case of an option, the holder only receives a benefit if the market price is higher then the strike price. For UPS, the option has been the right to purchase the stock at today's price at some future date. And the cost to the company is only realized when the option is exercised; and then the cost is only the difference between the strike price and the market price. If the stock price goes sideways or worse yet, goes down, the option has no value to the holder, and no cost to the company.</p><p> </p><p> For the RPU and RSU, there is ALWAYS a value to the holder, and a cost to the company. And that applies even if the share price declines.</p><p> </p><p> Flat out options, have a higher risk of a no or low payout. </p><p> </p><p> If rewarding the share owner (by increasing the share price) is truly the goal, options are the answer, as there is no reward if the share price is flat or goes down.</p><p> </p><p>It should be pointed out that since 2008, options represent only 25% of the LTI bonus and that only applies to Region Managers on up, so there is very little that is truly at risk.</p></blockquote><p></p>
[QUOTE="Black_6_Leader, post: 501542, member: 9413"] [I][/I][I][/I] [I] In general the answer is yes for options, and NO for RSUs & RPUs.[/I] In the case of an option, the holder only receives a benefit if the market price is higher then the strike price. For UPS, the option has been the right to purchase the stock at today's price at some future date. And the cost to the company is only realized when the option is exercised; and then the cost is only the difference between the strike price and the market price. If the stock price goes sideways or worse yet, goes down, the option has no value to the holder, and no cost to the company. For the RPU and RSU, there is ALWAYS a value to the holder, and a cost to the company. And that applies even if the share price declines. Flat out options, have a higher risk of a no or low payout. If rewarding the share owner (by increasing the share price) is truly the goal, options are the answer, as there is no reward if the share price is flat or goes down. It should be pointed out that since 2008, options represent only 25% of the LTI bonus and that only applies to Region Managers on up, so there is very little that is truly at risk. [/QUOTE]
Insert quotes…
Verification
Post reply
Home
Forums
Brown Cafe UPS Forum
UPS Discussions
LTIP for the CEO, COO & CFO
Top