I'm a young person. Will going away from profit sharing and doing company stock screw us over as time goes on? How does this affect taxes?
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Some of this info is wrong. These are not real stocks so you can’t “choose” to sell them. The money will be placed in a cash account where your 401k is. There is not a choice to keep or sell the stock.
The "stock program" also puts your $ at greater risk than spreading it across your selected 401K funds. Typically a well-managed fund will out perform a single stock (on average).
@1gso instead of getting between 1-3% of base pay in profit sharing each March we are now getting 1/3 of the grant in 2021 and likely double that amount (1/3 of the 2020 grant + 1/3 of the 2021 grant) in 2022. In 2023 and beyond you'll get close to 1/3 of 3 separate grants are partially vested. That doesn't even take into account the dividends and any appreciation in the stock price.
I know different grant amounts go to different pay bands, but this award should be much more valuable in the long run and that isn't even counting dividends and price change.
Assuming your grant was 2,000 (about 1/3 being the 600 you mention) and no pay band changes, you'll get at least
650 in 2021
1,300 in 2022
2,000 in 2023
plus all the dividends and stock price appreciation. I know we got 3% profit match last year, but in 2015 and 2016 I believe we only got 1% so this is much higher.
IT. S—S.
Its pretend money and pretend stocks. If you leave, you don't get any RSU money pending to vest. Even if you were awarded more pretend cash for pretend stocks the next year, the only way to get anything is staying here indefinitely.
As it stands I'll be getting about 600 in 2021when I got three times that amount in 2018.
The only way it will be better is if the stock continues to rise.
The $10B promise to share holders is a rock around Leaderships neck and they are looking for ways to cut Cash expense to add it into that Scorecard. They cut less than $4B in 2018 after an IT outsourcing, VSP and other job actions. Those were big ticket items & they dont have many more of those to punch. Bodies are the most expensive entry on the ledger but they need to be careful - the 2.0 alignment was needed but there is still significant overemployment in soft areas as well as too many chiefs/not enough Indians. Stock programs are an easier, less expensive way to reward workers as well as hold on to better ones in hopes of higher awards. This is all supposing the stock continues to perform.
Year and Profit Share amount into my 401k below....I guess will just have to wait to see how they determine the number of shares you get!
2019 2800
2018 1600
2017 800
2016 1500
Why would one have to replace the other? Directors and above have been benefiting from Profit Sharing and Stock Options for years. Just more of the company taking things away than giving employees more in my opinion.
This most likely will have around the same value or more then profit share, difference being that when your RSU vest you can sell it and use it for whatever you like. As profit share went into your 401k nog be seen till retirement Verizon matches already so I feel this change gives you better access to choose what you do with the money
I don't see it as beneficial. Both are taxed, it's just a matter of when.
We can't be sure until the details are released, but I'm fully expecting it to be more financially beneficial than the profit share plan that it's replacing.