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It's one of my basic (perhaps naive) believes that an important way to keep employees throughout the organization on-board with the company's highest aim (increased shareholder value), the company has to make its employees core shareholders of the business.If you create enough potential ownership value for employees, they'll probably even accept periodic enforced slowdowns and wage cuts to keep the enterprise competitive the world over. If I've been working at General Motors for 15 years on a manufacturing floor, and my GM stock plan is driving substantial value my way, I'm less likely to want to bring business to a grinding halt to make my point.Which all leads me to asking: How substantial is GM's stock plan -- in general and relative to the competition? Why wouldn't GM suffer some short-term dilution to get all of its employees onboard as important owners? Wouldn't you think most GM shareholders today would applaud a little dilution in exchange for a more enterprising workforce?Isn't stock value appreciation the name of the game -- and can't that be achieved by getting everyone in the workplace concentrated on that end (and rewarded for succeeding in that mission)?What say you, Fools?Tom
I agree ... something has to be done to bring the sides closer together. In light of articles such as:http://biz.yahoo.com/apf/980721/gm_strikes_1.html... anything 'rational' thought will probably not work with either side right now.I don't know about the stock plan as it is today, though. I'm looking forward to follow-on responses to your question, Tom.==> david
Well, hubby dearest has worked for 2 of the big three now. He used to work for Chyrsler, now is at GM. He worked in the IS dept at both companies. (What follows applies to salaried workers - I'm not sure of the differences for hourlies)At Chrysler, the 401K plan was pretty wide open. They had a decent selection (Merrill Lynch) of investment choices, including Chrysler stock. You could specify where you wanted the company's matching dollars to go - just like your own contributions. All bonuses we ever received were in cold hard cash.At GM, the 401K is more restricted. We are required to put the first half of salary contributions, up to 6%, in GM stock. (ie if you make 50K and put away 6% of your salary, you have to have $1500 in GM stock. If you put away 10%, you still max out at $1500 that has to be in GM stock) All of the matching monies come in GM stock. This past year, they introduced a stock option plan for salaried employees (how many options you get depends on your grade/level) This is apparently in lieu of a cash profit-sharing type bonus.I don't know if that's what you meant by "stock plan," Tom. But I can tell you that in the 401K plan, employees are both encouraged and forced to hold GM stock. Also, in the propaganda which accompanied the new stock option plan, it was made very clear that this was part of a company-wide effort to get employees focused on the bottom line. "When you make GM profitable, you profit!" and all that.I'm not sure what I think of all this. On a personal level, it seems like a *lot* of our eggs are in one basket with the forced holding of GM stock. But from GM's standpoint, I think it makes sense to keep the employees looking to the bottom line.(I know this doesn't touch exactly on the strike, as hubby isn't in the union. But they're at least doing as you suggest with the salaried folks.)Hope that helps,Laura
The description of GM's 401k plan given by Laura (MomAtHome) is exactly right. Match money and up to 3% must go into a GM stock fund (GM-Hughes is an alternate option to GM). However, she left off one detail--vesting.If you have at least 5 years of service, your required investments in GM stock funds vest IMMEDIATELY, meaning that while the money must go into a GM stock fund, you can take it out and put it in something else the next day.Even if you have less than 5 years, all the required investments in GM for say, 1998, vest on Jan. 1, 1999. Big deal.As an employee this is not very restrictive. But to respond to Tom Gardner's point, a longer required retention period may achieve what he believes creates a successful environment.
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