Golden handcuffs

My manager just called me about an hour ago and said he was happy to inform me that I am the recipient of an IBM Equity Award. Apparently these types of awards are management-initiated and require the backing of your 1st, 2nd, and 3rd line managers. After a bit of research I discovered that I have received these twice before and didn’t know it! Equity Award is the fancy label IBM gives to stock-related awards which I received in 2003/06 and 2003/12. (Yes, yes, I know that stocks are equities, lay off.) The previous two Equity Awards were stock options. The new award is a set of Restricted Stock Units (RSUs) who’s label told me absolutely nothing until I read up on it.

Apparently RSUs are a way for IBM to give someone actual stock, instead of stock options. They are similar to options however in that they take time to vest. Whereas IBM options vest 25% over 4 years, RSUs vest 50% every 2 years over 4 years. When they vest you are basically ‘given’ that many shares of stock minus taxes and whatnot. IBM very clearly states that Equity Awards are a mechanism to ‘retain truly exceptional people with the critical skills … to win in the marketplace today and in the future’ [courtesy of the IBM internal website], hence the phrase ‘golden handcuffs’. Looks like IBM wants to keep me around for a while. I’m not altogether certain that stock options (or RSUs) would be enough to retain me if I really wanted to leave (’cause its only money and I’d leave it in a heartbeat if I didn’t like what I was doing for work) but I agree that they are an excellent fringe benefit for staying!

A 4-year vesting time oddly coincides with our current 5-year plan which is nice (more on that in a later post).

In actuality I’d rather IBM pony up to the table when it comes time for annual performance reviews and salary adjustments. We shall see.