Restricted Stock Takes a BeatingFebruary 27, 2008 at 4:01 AM | Posted in investments, work | Leave a comment
Four years ago I was awarded $12,000 worth or restricted company shares. The stock shares vested over a four year period, which means every year the ownership of roughly 40 shares of company stock was transferred to me. The shares that had not vested continued to earn dividends and those dividends were paid out during the four year period. Four years later the stock is now fully vested but the shares are worth roughly 30% of their original value. So rather than owning $12,000 worth of company stock I own roughly $4,000.
Still I’ll take $4,000 worth of shares plus accumulated dividends over my worthless stock options any day. Stock options provide employees with the opportunity to buy company shares at a future point in time at a preset price. When the stock price rises the employee wins. When the stock price falls the employee loses. My stock options are beyond worthless.
Although I’m happy to receive something over nothing I will admit that $12,000 back in 2004 is a whole lot more impressive than $4,000 today. Will my company stock reach the 2004 price any time in the near future? Oh it’s very doubtful, but eventually it will recover at least some of it’s lost value.