All in RSU

This rule is a modification of a proposal that has been floating around for a few years. It is designed to allow individuals who exercise stock options, or vest in RSUs to delay recognizing the income and associated taxes. The theory is that this will allow people to become owners at a lower initial cost and catch up when there is some liquidity in the stock. BUT…

My name is Equity Compensation and I have recently read of my passing and that of my family. I am happy to announce that I am alive. Dan Walter, the President and CEO of Performensation wrote my obituary a bit prematurely ("Obituary for Equity Compensation"). Like any famous personality I fully expect people to have an obituary ready to go, but I dislike having it published before I am actually gone.

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.

IPOs and equity compensation have become almost mythical in the media and entertainment. Because of this they are often mythical in the eyes of your employees. We have all read about the massage therapist, artist or receptionist who became multimillionaire when their company went public. We have all see the headlines about twenty-something billionaires.

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.