Tag Archive: ESPP


“Can’t decide whether you are a Democrat or a Republican …”

Bless these two students, who on separate occasions, refreshingly relayed their puzzlement to your author.

Almost DailyBrett does not believe that classrooms should ever be the venue for the indoctrination, let along the formation of young warriors in the fight between noble socialism and evil capitalism.

Gee … maybe … just maybe these students are smart enough to make up their own minds on these issues?

Even though long-time Almost DailyBrett readers and contemporaries know or at least suspect your author’s political predilection, it was rewarding to know at least some of my students weren’t so sure … and that is how it should be for all professors or instructors.

There seems to be a contagious disease among tenure-track or tenured academic types (e.g., professors and instructors) that university students are there to endure for hours on end their personal political pontifications and bloviations.

Is that why students are taking out loans averaging $30,000 each, waiting tables or asking mom and dad to dig deep … real deep … for their college education?

Don’t think so.

Buy Low, Sell High

As Almost DailyBrett fondly looks back to more than five years teaching public relations, integrated marketing, corporate communications and investor relations, one particular moment always brings back tears to the eyes.

More than 30 of my Central Washington University PR students chanted in unison … “Buy Low, Sell High!” … at my retirement party.

Upon receiving the Central Washington University Department of Communication Faculty Spotlight Award, they gathered around me for a group picture. Your author will always remember this moment.

Isn’t Buy Low and Sell High the essence of capitalism, particularly publicly traded corporate capitalism?

The answer is “yes.” Keep in mind that buying low and selling high is easier said than done. More importantly this phrase is the backbone to the practice of fiduciary responsibility on behalf of the 54 percent of Americans investing in stocks and stock-based mutual funds.

America’s investor class — planning for retirements, funding higher education for their children, opening up a new businesses — require accurate and complete communication about a company’s business plan, financials and simply … how does a corporation make money.

The highest expected communications professional compensation levels … usually in six figures … are directed to students adept at financial communications, who are studying at today’s schools of journalism and mass communication.

Almost DailyBrett believes wholeheartedly the purpose of universities/colleges is to prepare students to attain and sustain salaried professional positions with full benefits … and maybe even employee stock purchase plans (ESPP) and/or stock options.

Universities and colleges should be professional schools, providing students with lifelong learning skills and tools to succeed in our increasingly complex digital world … including beating artificial intelligence (AI).

If students wish to Occupy Wall Street that should be their choice, not their command.

By the way, how did that movement work out?

Students should always be fully aware of the imperfections of Capitalism. For example, watching The Smartest Men In The Room (Fortune’s Bethany McLean’s tome on the Enron bankruptcy) was required for each of your author’s Corporate Communications/Investor Relations classes.

In addition to the aforementioned Fiduciary Responsibility, a publicly traded company needs to complement this requirement with Corporate Social Responsibility (CSR). Besides doing well, a company should be mindful of doing good … including giving back to communities, protecting the environment … that make success, possible.

Certainly, students can be taught to live in tents, recite cumbersome theory or rail at the world back in their own bedrooms at mom and dad’s house.

They also can learn how to decipher an income statement, a balance sheet, a cash-flow statement and to understand the significance and formulas associated with market capitalization, earnings per share (EPS), and price/earnings (P/E) ratios and related multiples.

Looking back at your author’s professorship, there is no doubt about political disposition. There was also a comprehension that students are to be prepared for the professional world, and many of these graduates have done well, real well.

And if a couple of students or more, can’t tell whether Almost DailyBrett or any other professor/instructor, drifts left or right that’s the way … it should be.

 

 

 

Many in academia and elsewhere lament economic inequality.

In fact, these same individuals are known to call for “social justice.”

The redistribution devil is in the details. Tax the rich s’il vous plait?

Wish it was just that easy.

Maybe we should all look in the mirror instead?

mirror

 

Three of the Biggest Factors for Economic Inequality

There are at least three major determinants, one potentially leading to another, when it comes to monetary disparity

1. Graduating from a real college or university

2. Securing admission to the best anti-poverty program of all: A well-paying private sector job with customary benefits

3. Investing in high-growth stocks and/or mutual funds

Come to think of it, these three contribute mightily to the gap between the haves and the have-nots.

According to Pew Research and reported by Andrew Kelly in his “Let’s Clarify The ‘College is Worth It’ Conversation” for Forbes, the disparity between those with bonified college degrees (e.g., BA or BS) and those with only as associate’s degree or worse, just a high school degree, has never been greater.

The record spread between those with bachelor’s degrees and those with associate’s is $15,500 annually, and $17,500 between the college grads and high school grads. The gap becomes staggering when multiplied over an anticipated 40-year career (that makes the big assumption that the AA or HS grad is still working – and not involuntarily put out to pasture — four decades later).

Without any further appreciation of the gap between the college graduate and her or his associates or high school peers, the 40-year disparity is $620,000 and $700,000 respectively. That’s big-time dinero even in this somewhat inflationary economy.

Certainly there is no guarantee that a bachelor’s degree leads to a moderate-to-high five-figure job, let alone to a six-figure position. In fact, many employers are now requiring master’s degrees or another two years of schooling. One point is certain; a bachelor’s degree is a ticket to compete for white-collar positions, something that an associate’s degree or high school diploma in virtually all cases does not provide.gradsandduck

And with the tough-to-attain, even-with-a-bachelor’s degree white-collar job, comes in most cases a salary, medical-dental-vision benefits and maybe participation in a company ESPP (Employee Stock Purchase Plan) or stock option program. Contemplate that we are not just talking about a salary, but discretionary resources that most likely will vault way above the present rate of inflation.

Investing Discretionary Income

Someone living paycheck-to-paycheck or worse sinking further into debt cannot conceive of discretionary income. They are just trying to make ends meet. Way-too-many Americans have nothing saved for retirement, and are one catastrophic event away from personal bankruptcy.

For those with bachelor’s degrees or above from reputable colleges and universities (sorry University of Phoenix; buying a degree doesn’t count), they can compete for well-paying private sector positions with benefits. They have resources to invest, and invest they do.

According to the Gallup Organization, 87 percent of upper-income Americans — those making $75,000 or more annually — own stocks, as do 83 percent of postgraduates and 73 percent of college graduates.

And what is a common-characteristic of “upper-income Americans”? A bachelor’s, master’s or doctorate degree. And which group commands the lion’s share of those who purchase equities and participate in our bull markets? Graduates and postgraduates.gender6

Are students being taught the tenets of capitalism at our leading colleges and universities? Maybe or maybe not. Are they figuring out that buying low and selling high with discretionary income is a proven way to build wealth? That appears to be the case.

Should they be required to redistribute the fruits of their long-hours in the classroom and their accomplishments at the workplace, thus reducing the amount they can invest in entrepreneurs?

There may be a professor or two, who thinks that is a swell idea.

http://www.forbes.com/sites/akelly/2014/05/31/lets-clarify-the-college-is-worth-it-conversation/

http://www.icifactbook.org/fb_ch6.html

http://money.cnn.com/2013/05/09/investing/american-stock-ownership/

http://www.gallup.com/poll/147206/Stock-Market-Investments-Lowest-1999.aspx

http://en.wikipedia.org/wiki/Economic_inequality

“People who are able to do something well can do that thing for a living, while people who are not able to do anything that well make a living by teaching.” —  Literary critic George Bernard Shaw

shaw

Sorry George.

The vast majority of decorated public relations pros are accomplished when it comes to bloviating and pontificating. They thrive on using PowerPoint and their clickers. Most of all, they love the stage and the spot light. These are all talents.

They counsel executives, choreograph communications campaigns, train presenters to face the media and others, and once in awhile they even get into a fight with a reporter…if that is what the job requires. They have oodles of experience spanning a decade or two, maybe even three.

They know the intricacies of public relations and communications. Their instincts are refined and proven. Their careers span the globe and may even include tenures in politics, government, corporate and/or agency work.

More importantly for many PR practitioners, they believe their days of marketing a client’s product that they really don’t care much about to a journalist who cares even less will eventually come to a merciful end. There just has to be something else in life.

Isn’t there the prospect of having the summer off as well as winter and spring breaks? They can just imagine having all that time to walk through the cobble-stone streets of Europe, stopping at sidewalk cafés and solving the problems of the world over glasses of wine with their newly found infinite academic wisdom.

Why not impart your repository of knowledge to the next generation of communicators? Why not fire up the PowerPoint, making sure there are batteries in the pointer/clicker, and start teaching? Sad to say, it is not that easy. There is a reality behind the perception of academic glory. (Those with Glossophobia or believe the words of George Bernard Shaw need not apply).

So what is the reality of college teaching for those who think the grass is greener on the academic side of the fence?

● Your days of six-figure salaries with stock options and participation in an Employee Stock Purchase Program (ESPP) will most likely be in your rear-view mirror. Instead, you are taking a vow of relative poverty (VORP). There are exceptions to every rule, but they are just that, exceptions. If you want to make millions, you should stay away from academia.

● When was the last time you took the Graduate Records Exam (GRE)? My first time was 1980. My second time was 2010. After those twitchin’ experiences, one must contend with the 19-month-plus forced march that will hopefully lead to a Master of Arts, Master of Science, MBA etc.  Are you sure you want to do this?

● If you think SEC regs are restrictive, please allow me to introduce you to academia. There are a few ways, very few, to write academic papers. Instead of The Associated Press Stylebook, there is the APA style, which has as much flexibility as a crocodile after it grabbed hold of your arm. APA stands for the American Psychological Association. How come the irony does not escape me?

“…South America is located directly south of Central and North America (Fouts, 1971; Musgrave, 1990; O’Neill, 1994; Graziani, 1995; Smith, 1998; Harrington, 2001 ). And Europe is situated on the other side of the Atlantic (Clemens, 2004; Dixon, 2007; Masoli, 2009; Thomas, 2011)…” There are literally hundreds of thousands of APA-style pages written this way, waiting for you to read and somehow understand them.

● You don’t just waltz into the classroom and start imparting your wisdom to an appreciative student audience clinging to every word. There is this thing, called a syllabus. Just like Bernard Montgomery planned his military thrusts against the Desert Fox, your syllabus illustrates step-by-step, day-by-day how you will teach your class. Weeks will be spent before the first class devising your syllabus. Say goodbye to spring break and good portions of your summer and winter break (It may actually provide you with a tantalizing excuse to avoid relatives during the holidays…see Almost DailyBrett, “If They Weren’t Your Relatives Would They Be Your Friends?”).

montyrommel

● Each lecture needs to be planned. How much time do I have? What points do I want to make? What questions should I expect? How will I divide up lecture to refresh student’s minds? Think of how you start mentally tuning out after about 20 minutes. Students will do the same, but maybe even in quicker time. After answering these questions and more, it is time to devise your PowerPoint presentation.

● You will have office hours. You will hear about the lives of students, some with serious issues…and others with not so serious issues…but all sound as if personal Armageddon is right around the corner. You want to be fair, but firm as well. This is easier said than done.

● No discussion about teaching can be complete without a discussion about grading, more grading and still even more grading. This reality seems universal among academics. Never underestimate the literally hours and hours of time spent grading. There is a certain amount of bandwidth it will take to devise a grading rubric to hopefully impart some consistency into your grading. Personally I am a serial editor. I mark up all papers, and the more work I have to do, the lower the grade.

Once you have completed your grading, then it is time to return the documents to your students. The results of multiple guess exams should be easier for them to accept as one either answers the question correctly or not. Grading one-page memos, shareholder letters, portfolios, research papers is a subjective exercise. Always take cover and fix bayonets when you assign a B+ or even worse, an A- to a student’s work. She or he is so close, yet so far from the Promised Land. Expect a challenge here and there. Be prepared to defend your decision with a smile on your face, but don’t anticipate a smile in return.

And always be prepared for the “Rule of One.” At least one student will literally hate your guts and will make that point unequivocally clear in your quarter-end course evaluation.

Certainly, I did not exhaust all of the issues (e.g., cheating, plagiarism, dominating students) that will come before you if you decide to traverse the yellow brick road of academia. Should you do it? I humbly opine that teaching is a great way to give back to the public relations profession by preparing the communications choreographers of tomorrow. At the same time, you need to be prepared for the largely inflexible new world of academia in which change comes at glacial pace.

There are many logical reasons to bypass this opportunity. There is an equal amount of illogical reasons why you should take the plunge as well.

http://en.wikipedia.org/wiki/George_Bernard_Shaw

https://almostdailybrett.wordpress.com/2010/12/28/if-they-weren%e2%80%99t-your-relatives-would-they-be-your-friends/

In the age of the “forward” button on the Microsoft Outlook toolbar, there is no such thing as a family letter for major publicly traded corporations, particularly one with more than 300,000 employees, $114 billion in revenues and $98 billion in market capitalization.

So if this truth is indivisible, you might as well treat an employee letter as any other public transmission to Wall Street, your customers, your partners, your suppliers, both the financial (buy and sell side) and the market analyst communities and of course the media.

Let’s face it, Hewlett-Packard through no fault of its own fired the shot Hurd around the tech world Friday with the stunning news that Mark Hurd was being removed as CEO. The cause was the announced falsification of expense reports in a sexual harassment case involving a very good-looking 50-year-old marketer by the name of Jodie Fisher.http://online.wsj.com/article/SB10001424052748703309704575413663370670900.html

There will be those who will criticize HP’s handling of this fire drill, and only time will tell how well they handled the damage. The Almost DailyBrett immediate take was the company was smart and SEC-compliant in immediately announcing the stunning development. http://www.hp.com/hpinfo/newsroom/press/2010/100806a.html Included in that announcement was an update on the upcoming third quarter results on both a GAAP and non-GAAP (pro forma) basis as well as using the same metrics for the 2010 fiscal year. The first indication of the success of this strategy will be revealed in the first few hours of trading on Monday.

(Almost DailyBrett note: HPQ was taking a 7 percent hair cut around noon EDT on Monday…pretty much what you would expect).

The company announced that a very familiar name, company CFO Cathie Lesjak, would serve as interim CEO, even though she is not seeking the job on a full-time basis. A global search, including candidates both inside and outside HP, has commenced (no reason to introduce another Carly Fiorina into the mix).

Included in the strategy was Lesjak’s letter to employees, which she knew would be leaked in nanoseconds. The obvious purpose was not just to prop up morale and foster retention of the best and the brightest, but to reassure investors, including all of those employees with ESPP (Employee Stock Purchase Plans) and stock options.  http://online.wsj.com/article/SB10001424052748704182304575416002591565396.html

“While this news is unexpected, HP remains in an exceptionally strong position both financially and in the marketplace,” she was quoted in the letter. “It is essential, however, that we remain focused and continue to achieve – if not exceed – our operational and financial objectives.

“…As we regularly remind all employees, each of us is expected to adhere strictly to the Standards of Business Conduct in all of our business dealings and relationships. This expectation applies with even greater force to HP’s CEO and other senior executives who, given their positions, must set the highest standard for professional and personal conduct. The investigation that was conducted revealed that Mark had failed to meet this standard.

(There is probably no better time in HP’s history to remind employees that the rules apply to everyone, including well compensated CEOs).

“We recognize that this change in leadership is unexpected news. We also know that HP’s success in recent years is due to the collective efforts and hard work of more than 300,000 talented employees who have formulated far-reaching strategies and achieved our objectives better than anyone else in the industry.

(Good time to work on retention in the face of a morale-impacting, confidence-shaking announcement)

“…In closing, I would like to thank each of you for your contributions to HP, and to ask that in the weeks and months to come we do everything to ensure that HP’s future, like its past, is one of innovation, operational excellence, and the delivery of world-class products and services.”

(Almost DailyBrett postscript: Ms. Jodie Fisher says ex-cathedra that her relationship with Mark Hurd was not sexual…and yet a sexual harassment claim and falsified expense reports. This one is difficult to believe.) http://www.washingtonpost.com/wp-dyn/content/article/2010/08/08/AR2010080800296.html?wpisrc=nl_headline

Guess I have been hanging around anal Silicon Valley engineering types way too long.

For those living outside tech hubs in California, Texas, Oregon, Arizona, New York, Massachusetts, Muenchen etc., geeks adore their charts, numbers and “data points.” They don’t do “nuance” or “ballpark” estimates; just the facts mam to the exact nanosecond or at least eight digits after the decimal point. That’s good calibration.

Microsoft is naturally populated with gear-heads, in fact thousands of them. They invented Word for documents, PowerPoint for presentations, but more to the point they created Excel spread sheets so we can populate these grids and columns with numbers and data points.

Why can’t senior public relations, media and marketing pros with liberal arts degrees use these same spread-sheet tools to weigh competing paths to determine the best course for our careers? We have all read about the jobless recovery nationwide and worldwide. Some are even suggesting that systemic European-style double-digit unemployment will be the new norm. I am much more optimistic.

In the last decade we experienced a severe labor shortage with a corresponding talent attraction and retention crisis. We should be prepared for a paradigm shift (there’s an oldie, but a goodie) from a Seller’s (employer) market to a Buyer’s (employee) market. Don’t be surprised if the days of multiple offers are right over the horizon.

Humor me. Let’s say that you have two competing offers. Will you simply just compare salaries and benefits and then consider who will be your boss and what will be your responsibilities? That’s not how an engineer would approach it.

The geeky engineer would get out his or her Excel spread sheet and create (at least) three columns: the first for the issue to be assessed, analyzed, probed and scrutinized; the second for prospective employer “A”; and the third for prospective employer “B.”

Filling in the data points on the spread sheet, let’s first compare the competing offers from Employer “A” and Employer “B.” Now factor in benefits (e.g. medical, dental, vision, IRA). Okay, let’s include bonus and related percentage of salary. Is the bonus paid yearly? Twice yearly?

Are both companies, private? If so, what are the chances that either or both will ever go public, and if so, is there an equity incentive for you?

Are both companies publicly traded? Or is one publicly traded and the other is not? What is the stock price and performance of the public company’s shares? What are the analysts saying?

Will you be given the opportunity to participate in ESPP (Employee Stock Purchase Plan) and offered stock options? Does that mean that opting for a publicly traded company is better than working for a privately held company or even a non-profit? Not so fast my friend. Maybe the privately held company will be acquired or opt for its own IPO. Or maybe it will just stand alone?

What will be your cumulative income including salary, benefits, stock compensation, employer IRA contribution etc after two years with Employer A and then Employer B?

What are the internal risks to the two jobs? Are you going to be pressured to drum up new business and reach set quotas? What are the consequences of not succeeding whether or not you have any influence (e.g. massive recession)? What are the external risks associated with the jobs? For example, could Employer A be acquired? Could Employer B come under severe scrutiny by the SEC? Every employer has rumors that go with them. What is being said on the grapevine?

Don’t just read the lines; read in-between the lines.

Now let’s add housing, weather and transportation to the spread sheet. Do you have to move? Will you be offered relocation? What are the living costs in one locale vs. another? What are the differences in culture and climate? Can you (and your family, if applicable) handle extreme heat? Endure bitter cold? Tolerate frequent rain and gloom?

Here’s a big one for many: How long is your commute and are there any alternatives to battling other drivers in a slow parade to-and-from work every day. Let’s say it takes you one hour on the average to commute in the morning and ditto for the afternoon. That translates into two hours each day, 10 hours each week, 40 hours each month and approximately 480 hours each year…you just lost 20 days of your year to commuting…How much is that worth to you in terms of not only wear and tear on your vehicle, but wear and tear on you? Does $20,000 sound right or about $1,000 for each day ($125 per hour) that you are losing to unproductive commuting?

Probably the most important contrast is where are you going to be career-wise with Employer “A” in five years compared to the same amount of time with Employer “B?” Assuming a positive working environment, what can you reasonably expect to be doing in five years with Employer A vs. what is your career path during the same time period with Employer B?

And let’s not forget what is the reputation and brand management history of the two prospective employers? Are you comfortable with the two stories, or one over the other, or neither of them? And do you want to be telling this story and building this brand for the next year, the next two years…

What do you want to be? Where do you want to be? What will be your quality of life? When and if the time comes to make a key employment, career and lifestyle decision, a geeky spread sheet may be the most important item in your tool kit.

When it comes to the most influential target audiences for publicly traded companies, they can be essentially boiled down to the acronym “CEO”: Customers, Employees and Owners.

Company executives have long championed “serving customers” and “creating shareholder value” and they should continue as these two groups drive revenues and enhance market capitalization. Unfortunately the same level of enthusiasm is rarely afforded to a company’s number one asset, its employees.

One obvious reason is that the care and feeding of employees represents the lion’s share of the expense side of the ledger. These costs are not just salaries, but a growing array of benefits, incentives and government mandates (e.g. parental leave).

Despite this overall lack of attention on “E,” the nation is nonetheless transfixed on the stubborn 9.7 percent unemployment number, particularly that “only” 36,000 lost their jobs in February. The U.S Department of Labor’s Bureau of Labor Statistics reported a total of 14.9 million unemployed; 8.8 million forced to work part-time out of economy necessity and 1.2 million discouraged workers, who don’t believe a job exists for them http://www.bls.gov/news.release/empsit.nr0.htm Add it all up and we are talking about 25 million unhappy people in a nation of 300 million.

We should also keep in mind that DOL also reported that 138 million Americans are working. Many of these workers are saddled with lousy bosses or have limited upward mobility and feel trapped in their jobs because of the nearly double-digit unemployment and the lack of alternatives. This scenario seems to be gradually changing, which means that the “E” for employees could soon be receiving comparable executive attention, if not love, as the “C” for customers and the “O” for shareholders.

Failing to attract or losing the best and the brightest is extremely costly to companies. I have seen figures up to $60,000 to replace each management or high-talent employee, when search, training and lost productivity is included in the equation. For example, technology companies are particularly vulnerable to the potential loss of software and/or hardware engineers. Financial services firms rely on investment bankers, fiscal analysts, accountants and controllers with MBAs to demonstrate gravitas to clients.

So what should companies do in this shifting economic environment to provide for the proper care and feeding of their valuable employees?

● Don’t wait for “retention” to become a major problem; make it a priority right now. The recession is over and the choppy recovery has begun. This is the time to challenge your employees, add to their responsibilities, listen to their concerns, provide them with growth paths and let them know they are key players in the success of the company. Before going out and recruiting away employees from competitors, companies should be concerned about protecting their “base” employees from rival cherry pickers.

● Engage and over-communicate with employees, including using low-grade technology in the form of CEO all-hands meetings with PowerPoint graphics. The purpose is to not only share business strategies with employees, but to listen and hear their concerns as well. Use corporate intranets to publish stories, announcements and blogs about the company’s direction and accomplishments. Ditto for social media, encouraging employees to read about the company and its brand-building activities via Twitter, LinkedIn.com, Facebook and others.

● View Investor Relations, Corporate Public Relations and Employee Communications as being linked. A high percentage of employees in publicly traded companies, particularly technology and biotech, participate in ESPP (Employee Stock Purchase Plans) and stock option programs. They are very interested and savvy investors in the company’s stock and that contributes to market cap. Corporate positioning should be outward to investors, customers, suppliers, partners, analysts and media, and also inward to investing and contributing employees.

● Consider having Investor Relations, Corporate Public Relations and Employee Communications report to the Chief Financial Officer. In many cases Employee Communications reports to Human Resources, which used to make some sense, but becomes less so with even greater SEC scrutiny on fair-disclosure issues. Naturally, Employee Communications should interact regularly with HR, particularly on benefits, but the CFO holds more sway on investor issues, corporate development, strategic acquisitions/integration and the reasons behind restructurings and layoffs.

● Sweat the details when it comes to the “management style” of middle managers. Do they micromanage? Are they arrogant, unreceptive and simply fail to listen and hear legitimate concerns? Do they have their own agendas? Should they be managing people in the first place? Let’s face it; bad bosses will eventually erode morale and prompt more good people to run for the exits, particularly in an expanding economy creating new opportunities.

As both a physical and economic spring returns to the landscape, it is time to make the care and feeding of employees a major priority. Cherry picking is a growth industry. The best defense is a good offense. It’s time to make employee communications a priority.

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