for sale

I ended yesterday mentioning the sale of the company I work for.

At the time I talked a lot about "cake".  I may have subsequently explained this, but the cake in question was actually an employee share scheme.  Basically the Managing Director wants to retire.  To do this she needs to sell the company so that she can release a nice pot of money for her to go away with.

However, if you say to all the employees "I'm selling the company so I can retire" they may not view that too kindly as it introduces a lot of uncertainty, particularly around who will take over and what the new conditions will be like.  This would therefore generally encourage the employees to look for new jobs, so by having the share scheme you effectively promise to give away a chunk of that sale money so that those people hang around.

My problem is that basically I've ended up with a share option, rather than actual shares.  This option means that I have the option to buy the shares at a later date at a reduced price.  The idea therefore being I sell the shares immediately as part of the whole sale and the difference between what they pay and what I get is therefore a nice sum of money.

But there are some problems.

The company is currently worth nothing.  Now this is deliberate as it's basically a way of minimising tax, but it also means that the shares I've got are next to worthless.  If sold the next day I wouldn't even have been able to pay off my smallest credit card debt.

Now in some ways that's a good thing in that it means they have the potential for the maximum gain, but the real problem is that I have no idea how many shares there are total and what my proportion of those shares is, and I only have vague ideas what the company is currently worth, what it might sell for eventually, and there are no mechanisms to know how the company/share value is changing.

So, to use some simple numbers, it's all very well knowing that at the start I have the option to buy 1,000 at 10p each and sell them at 20p each.  That means I would get £100.  But I have no way of knowing if the value of the shares has doubled across the year or tripled, or halved or what.

The other issue over the proportion of shares makes things even more complicated.  Basically, for example, there are actually 1,000 shares, and what they've done is take, say, 100 of those shares, turn that into 1,000 shares, revalue them, and then distribute them to the employees.

This makes things very complicated to calculate the actual value of the shares.  With the above numbers, if they sold each original share for £1, that means that the 100 shares would be worth £100, but as I say, they've then made each of the actual shares distributed 1/10 of those shares, so actually we get shares worth 10p each.  This means it might seem attractive to us to sell the shares at £1, but then we only get 10% of that.  Or, remember, we need to buy these shares at 5p each, so really we get 5% of the value.

But of course I don't know the real numbers.  So if I've been given 1,000 shares is that a big proportion of the total pot?  Have I got 10% of the shares?  Or 0.01%?  And this really matters because it affects what I actually stand to make, but I can't know, so it's all a bit meaningless.

It's like if I give you a million spondulics, have I just given you a fortune or nothing at all?  Of course you didn't have any spondulics to start with, so in a way you've got a fortune, but only in spondulic terms.

I've been with the company the longest, which from what I was told means I have a bigger proportion of the shares.  But then I was told a lot about the share scheme when I agreed to stay on and only a small proportion of it has turned out to be true.  Firstly I was told there would be dividends.  Well, there are no dividends on share options.  I don't own any shares, so I've nothing to receive a dividend on.

It also transpires that the shares have been divided up based on seniority as the most important factor, rather than length of service.  I mean, that's a factor, but seniority is a more important factor and of course I'm in the "middle" tier, so I'm pretty sure I have less shares than the directors, even though they've only been here a couple of years and I've been here more than a decade.

And here's the other thing - I'm underpaid.  I've also been underpaid for the last five years when I didn't have a single pay rise, despite the rapidly escalating cost of living.

I have debt because I was underpaid (well, that and me being a fucking moron).  So what's better, getting a new job that pays the market rate now?  Or gambling that the amount I get down the line is sufficient to make up for that underpayment+ a little more?

Well looking at some numbers I can't make the latter make sense.  Plus, as mentioned, I don't really enjoy working here any more.

So why stay?  Particularly since it will be at least three years before the company is actually sold.  I can't stay here three years - I can't stay six months.  Did I mention I don't enjoy working here any more?