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Employee Stock Options

I'm curious as to what other agencies are doing for employee stock options. We are wanting to offer something, but we want to see what is the norm.

Felica Sparks Henry
ARBentonBen tonnNew tontising

I don't think there is a "norm". I assume you are looking for ways to motivate key employees. Stock options don't have the appeal they once did. Spending your money on really good medical benefits & profit sharing plan is better sometimes. Some option plans are costly to administer.

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing

We are a design firm with 15 employees. We do not offer stock options. We do give a Christmas bonus to all employees.

Jean Klundt
Klundt Hosmer Design

I agree with Roxanne. We are a small firm and it is hard to gage the "value" of our stock. Our employees have valued our health benefits, 401k plan and profit sharing plan.

Shannon Ellis
Business Manager
Tackett Barbaria Design Group

What about profit sharing plans? I would like some ideas on what people are doing.

Tony Jeter
JB Herrmann

We are a relatively new agency (3 years old) and we started a profit sharing plan last year. We decided what we could afford to allocate to the plan and then apportioned that to individual employees by earnings. Not sure if we will continue that policy this year or pick another method to determine the contribution amount.

Allen Corley
Controller
WarrenCordes+

A) Paychex has a pretty inexpensive plan to administer. Between 401K and profit sharing - employee can defer up to 15% of salary. Really works well when you use their payroll service too. If there are fewer principals and highly compensated employees than staff - this plan is the easiest to budget for from a business perspective.

B) But if your agency is small - and principals and key employees outnumber staff, a profit sharing plan w/ 401K, combined with a money purchase pension plan will allow you to defer the maximum allowed salary (25% per IRS). A little more expensive to administer, but extremely good way to defer the most for retirement. We've done both.

Roxanne Cowan
Rutherford Bolen Group Integrated Mareting

All employees who have been here for at lease two years are eligible for our profit sharing plan. We are required to distribute the same pre-tax % of compensation to each employee or principal. The amount at the end of the year available to distribute depends on our profitability. Your CPA should be able to provide you with more information on what would be best for your firm.

Shannon Ellis
Business Manager
Tackett Barbaria Design Group

ADP offers a similar product.

Terry L. Jones, Jr.
Controller
Harvey and Daughters, Inc.