The company I previously worked for often rewarded employees with stock and stock options. When I joined the company in 1999 coworkers told stories of company bonuses that averaged $15,000. They told me one day everyone drove to work in beat up old cars and one week later the garage was filled with sparkly, new SUVs.
During my time there the overall stock compensation dropped, but I was the benefactor of quite a few solid performance reviews which almost always resulted in additional shares. Actually stock came to employees in many forms. There was an ESOP, (Employee Stock Ownership Program), an ESPP (Employee Stock Performance Program) and general compensation for performance in the form of stock options and restricted stock.
For years the company stock seemed like a sure bet and many employees held onto every share the company ever offered them. Employees never talked to each other much about this until the stock price significantly dropped. Then coworkers suddenly began whispering about just how much money they lost over the course of months, weeks and days. It was commonplace to find my coworkers hunched over yahoo finance pages typing in ticker symbols and looking at falling graphs.
I switched between selling my stock as quickly as I received it and holding onto it, so unlike a lot of my coworkers I didn’t have thousands of shares tied up in the company. In fact, as luck would have it I sold the majority of my remaining stock holdings in 2005. The stock was no longer at it’s peak, but I managed to sell roughly 600 shares for $33,000. Today that same stock would value at just over $900.
I used that money as the basis of a down payment for my beach house and never thought twice about it. I didn’t own much stock, but I certainly lucked out in when I decided to sell it. Unfortunately some shares of stock were tied up in retirement accounts that employees, like myself, were unable to touch. I don’t remember how much money was in that account at the peak, but I imagine I easily lost between $10,000 and $15,000.
I feel bad for the employees who held so tightly onto their stock. A lot of them worked at the company for 20 years and watched their retirement savings dwindle down to a few thousand dollars.
Actually, if I hadn’t purchased my house in 2005 I’m not sure that I would have sold the stock myself. I guess I just lucked out in the timing of it. Holding onto that stock would have resulted in at least a $32,000 loss.