Discussion about "Some Stock Plans See Scant Supply - Wall Street Journal"
Some Stock Plans See Scant Supply - Wall Street Journal
By JILIAN MINCER
Some companies are running out of shares for their employee stock purchase plans.
The shortage has left companies in an awkward position: While they
would like to commit more shares to the programs, they are reluctant to
ask shareholders, already unhappy about low stock prices, to approve
such a move.
But many have, as almost 140 companies in the Russell 3000 index
amended an existing employee stock purchase plan between January and
Oct. 21, according to RiskMetrics, a proxy adviser. That compares with
100 in 2008 and 81 in 2007. Almost all amendments are a request to
increase the number of shares available for issuance.
"As the share prices have gone down, they've used their shares more
quickly than they anticipated," said Nancy Mesereau, vice president of
Fidelity Stock Plan Services.
| Topic | Replies | Likes | Views | Participants | Last Reply |
|---|---|---|---|---|---|
| LinkedIn will be the ONLY home for the ECE beginning October 1, 2020 | 0 | 0 | 101 | ||
| Mergers and Acquisitions and Section 16(b) Romeo and Dye treatise | 0 | 0 | 715 | ||
| IRS and Social Security Limit Changes for 2019 | 0 | 0 | 529 |
Here's a link to a detailed article I wrote about this topic in November 2008 and republished in January 2009. My article includes some suggestions on how to correct the problem.
Have evergreen provisions become less common? I can understand why they would be less desireable from a shareholder's perspective. Yet from an administration standpoint they save a lot of sleepless nights, don't they? Moreover, when employees put away a good portion of their hard earned income in anticipation of company stock only to realize it was for naught, it is pretty frustrating.
One of the surprising results of the ESPP survey conducted by the NCEO and CEP Institute in June and July was the small percentage of companies that expect to run out of shares in their plans in 2009 or 2010. Only 5% of the companies represented expected to run out of shares in 2009; and 7% expected to run out in 2010.
Information about the survey is available at http://www.nceo.org/main/misc.php/id/152/