All in ESPP

Stock Options, Restricted Stock Units, young Performance Units and their cousin Non-Qualified Deferred compensation tragically died in 2017 as an unintended consequence of colliding with the 429 page U.S. tax reform called the ‘‘Tax Cuts and Jobs Act.’’ It should be noted that Employee Stock Purchase Plan is currently in critical condition at a local hospital.

ESPP are an ugly duckling in the world of compensation, or benefits, or payroll, or HR, or stock administration. The fact that they do not elegantly and easily fall into any single area is proof of their misshapen, clumsy bodies and inability to look and act like any other pay or benefits tool. But, when ESPPs are nurtured they can grow into something beautiful. And, when people are properly educated about them, the odd features and awkward start can still result in something special.

For more than 25 years, tech companies have used equity to share ownership and motivate people to perform better and augment (sometimes) under-market base pay. Before this, company stars sometimes did well, but those who came in early and helped turn a good idea into a great company received little more than experience and the pleasure of the job. Broadway companies are finally seeing the benefit of sharing more than just acclaim.

Please note, that for all of the talk about pay clawbacks, it appears that both Mr. Stumpf and Ms. Tolstedt each still have over $100 million in potential retirement payments that remain outstanding.