Sunday, November 1, 2009
Employee Stock Options Simplified,
Safety in the Workplace,
Monthly Contest Winner,
September 2009 Manufacturing ISM Report on Business,
Network with Orion
Employee Stock Options Simplified
More and more companies are utilizing stock options as a way to retain top talent or attract motivated workers. An employee generally benefits from stock options through an employee compensation plan. Stock options are defined by Wikipedia as “a call option on the common stock of a company, issued as a frorm of non-cash compensation.”
A common stock option term is “exercise.” An employee stock option gives you the right to “exercise,” or buy, a number of your employer’s shares at a certain price (called the strike, award or exercise price) during a defined period of time (called the exercise period).
The two most common types of employee stock option plans are as follows:
• Non qualified stock options – These options are allowed to be given at a discount to what the stock’s value actually is. If the employer permits it, they are also transferrable to children and non-profit organziations. They are not eligible for special taxes (unless held for a period of time after being exercised). Taxes must be paid in the year they are exercised.
• Qualified stock options – Also called incentive stock options (ISO’s), these options qualify for special taxes known as capital gains tax (so long as they are kept for a period of time) instead of the regular tax rates which are higher. Recognize, however, that Alternative Minimum Taxes (AMT) may apply, so be sure to investigate thoroughly. This type of option is generally reserved for upper management.
Each stock option has a “strike price”. This is the price at which you can exercise your options. This specific price is listed in your agreement. Keep in mind that agreements are specific to individuals. This means that each employee has a different agreement. So, don’t assume you and your co-worker have the same options contract.
There are a few ways to exercise stock options. But keep in mind before you exercise your options, you must vest. Vesting involves an employee acquiring the rights to purchase stock options. Generally this takes a period of time. Once you do vest and exercise options, many companies will require that you stay with the company for a period of time thereafter. Also, the right to exercise expires after a certain period of time. Each company has their own time frame, but the expiration typically happens within a few years of vesting. Once you exercise, your stock options are usually transferred to a brokerage account. When you are ready to sell, the broker needs to be informed. There are only a few restrictions to this. If the stock is restricted, you aren’t allowed to sell the stock or if your company’s stock is not publicly traded. All of these things should be investigated when you are considering your company or potential company’s incentive package.
Safety in the Workplace
Safety programs are key to a company’s success. Ensuring the health and safety of employees can help organizations minimize fines, avoid negative press, avoid costly workers compensation, property, and casualty insurance, and foster a comforting sense of safety among workers. An article by Deb Potter on http://www.sideroad.com, provides startling statistics; “Every day in the United States on the average, 15 workers lose their lives as a result of injuries or illnesses related to their work - that's over 5700 people.” The industries with the most injuries and deaths range from fishermen and structural metal workers to farmers and roofers.
Clearly, workplace safety is an important factor that contributes to the achievement of an organization. So what are some of the elements that successful safety plans contain?
• Management commitment
• Employee involvement/engagement
• Clearly written policies and procedures
• Superb training on all policies and procedures
• Ensure all machinery and equipment is in working order (properly that is)
• Disaster preparedness
• Workplace violence avoidance programs/training
• Clear goals and objectives
• Safety tracking and measurements
• Safety inspections/audits from OSHA and other regulatory agencies
• Committees that oversee safety and include all organizational levels
• Safety communications
Safety is an important workplace issue. Many employees expect safety to be a part of their job. The Occupational Safety and Health Administration (OSHA) was created by Congress to help protect workers by setting and enforcing workplace safety and health standards and by providing safety and health information, training, and assistance to workers and employers. Their mission is to send every worker home whole and healthy every day. Safety programs should be a part of every organization and are definitely a fiscally responsible decision.
Congratulations to This Month's Winner
September 2009 Manufacturing ISM Report on Business
The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM). ISM is largely considered the most respected supply management organization in the world. The Manufacturing ISM Report On Business is a national index based on surveying purchasing and supply executives at over 300 industrial organizations. The Report’s market importance is extremely high. It is the most valuable of all manufacturing indices.
Economic activity in the manufacturing sector grew for the second consecutive month, while the overall economy grew for the 5th consecutive month, the nation’s supply executives reported in the latest Manufacturing ISM Report On Business. The PMI was at 52.6%, down slightly from August’s 52.9%. Thirteen of the eighteen manufacturing industries reported growth.
The New Orders Index registered at 60.8% in September. The Production Index was 55.7%, a decrease of 6.2% from August. Any Production Index above 50.4% indicates an increase in the Federal Reserve Board’s Industrial Production Figures.
The Employment Index registered 46.2%, 0.2 percentage points lower than August’s 46.4%. This was the 14th consecutive month of decline in employment. However, three of the eighteen industries showed employment growth. They were: Apparel, Leather & Allied Products; Wood Products; and Transportation Equipment.
Manufacturer’s Inventories registered at 42.5% in September, 8.1% higher than in August. The Customer’s Inventories Index registered at 39%.
The ISM Prices Index in September was 63.5%, and the Backlog of Orders Index was 53.5% in September, one percentage point higher than the previous month. ISM’s New Export Orders Index registered at 55% in September. This was the 3rd consecutive month of growth in the New Export Orders Index.
The industries reporting growth in September were: Wood Products; Paper Products; Apparel, Leather & Allied Products; Transportation Equipment; Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products.
The industries reporting contraction in September were: Primary Metals; Furniture & Related Products; Plastics & Rubber Products; and Machinery.
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