Buy individual stock to maintain my honor?

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Dude2
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Buy individual stock to maintain my honor?

Post by Dude2 » Wed Mar 21, 2018 10:09 am

I would be interested in your opinions or comments about the following situation. Recently I was hired by a company I used to work for and given a $10,000 signing bonus. The fine print told me that if I left the job before two years, I’d have to pay it back. Well, although I had worked for this company before, they had just done a massive acquisition that doubled the size, and I ended up working for the “other side.” It didn’t work out, and after seven months I left. I brought my checkbook to the out processing and informed HR that I was fully prepared to pay back the money. HR hemmed and hawed and said something about a cashier’s check, that somebody would contact me, a bunch of very vague talk. After over a year, I have not received any bill or contact on this. When I received my W-2 for that tax year, it was as though I had paid the money back. They did not include in in my wages. Thus, not only did they give me the money, they paid the taxes too.

Flash forward a bit in time. I ended up going to another employer, got a $10,000 signing bonus, same exact story. I left this company too after seven months, and they similarly made zero effort to collect the money, although in this case it was reported as income on my W-2.

I’m up $20,000 for switching jobs twice. In each case I felt I had been a victim of a bait and switch in regards to the purported job and the actual job situation. I feel somewhat justified in keeping the money due to the hassle and disruption to my life (times two), but at other times I think that might just be ego.

I don’t know why they did not collect. I have been in this situation before and had no problems with paying back monies of this nature. My only theory is that there seems to be some sort of program specific to Florida which provides property tax breaks to employers if they hired x number of new workers. Each of the above employers had built grandiose new buildings and were surely incentivized to save on property tax. My theory is that they could not claim me as a new employee and be eligible for the tax break if they made me pay them back. It sounds kind of weak, I know. Note that these are both giant defense contractors with deep pockets, but nobody ever got anywhere in business by giving money away.

I am an honorable person who does not like to take something that technically is not mine. Before anybody suggest that I just send them each a check, I’ve been down that road. I’ve had a couple of experiences where I ended up owing my company money due to a mistake on an expense report. When I brought it to their attention, I had to twist their arm to acknowledge that I needed to pay them and to tell me how to do so. When I sent in a check, it just ended up uncashed for years. I’ve had that happen twice. For some reason they were unable to withdraw from paycheck (some accounting nightmares).

Now I get to the crux. All of this has led me to a plan which I feel allows me to maintain my honor. I will simply buy $10,000 in the stock of each company. I am giving them back their money in this fashion. I’m not quite sure of how to ultimately dispose of the stock. Perhaps when (if) the stock price doubles, I could keep half for myself and give half to charity. Is that honorable?

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Pajamas
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Re: Buy individual stock to maintain my honor?

Post by Pajamas » Wed Mar 21, 2018 10:23 am

I have been in only one similar situation, and the amount that I had to repay was correctly deducted from my final paycheck without me doing anything.

You tried to repay one company and they basically refused to accept your payment. The other company apparently deliberately made a gift to you. In my opinion, you are not required to go to great lengths to battle their incompetence or ignorance or whatever it is. You are overthinking this and should just forget about it. You have no further obligation and what you are proposing wouldn't fulfill an obligation if you had one.

If you really can't sleep at night, make an equivalent donation to a charitable organization. Maybe choose one that is related to the industry, such as to an organization that provides free summer coding camps to poor kids if you are a coder.

barnaclebob
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Re: Buy individual stock to maintain my honor?

Post by barnaclebob » Wed Mar 21, 2018 10:27 am

Don't be silly. The corporate machine has many inefficiencies, its not your job to feel bad when one works out in your favor. You have done all you need to do.

My wife was taking a class that didn't meet the requirements for tuition reimbursement but the company paid anyway. It was a huge effort to get the company to acknowledge the issue, and for her to coordinate either a refund from the school or to pay it back herself.

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Sandtrap
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Re: Buy individual stock to maintain my honor?

Post by Sandtrap » Wed Mar 21, 2018 10:31 am

The honor. . . is in your conscientiousness. . . that you are holding yourself accountable.
So, you've already done your part. You've already "maintained your honor". Pat yourself on the back.

You can't control anything or anyone beyond that.
If you need external validation. . . :shock:

Sometime in the years to come you will have more than 1 opportunity to "pay it forward" through gesture or effort, not necessarily monetary.
IMHO: move on.

BTW: you are a a wonderful fellow for the thought and gesture. :D

aloha
j :D

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goingup
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Re: Buy individual stock to maintain my honor?

Post by goingup » Wed Mar 21, 2018 10:45 am

I'm sure there's some appropriate karmic remedy, but buying company stock doesn't seem like a good idea.

I think you just have to process this as luck, and not an intentionally shrewd money grab on your part. It seems strange it keeps happening though. Maybe your career destiny is contract work, where impermanence is the norm.

Don't feel guilty. It's just serendipity. :beer

bloom2708
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Re: Buy individual stock to maintain my honor?

Post by bloom2708 » Wed Mar 21, 2018 10:51 am

Buy $20k worth of Total US + Total International.

I'm sure both stocks are "in there". Absolutely no reason to buy the stocks of companies you used to work for. Or buy individual stocks.

Onward and upward...
Where to spend your time: | 1. You completely control <--spend your time here! | 2. You partially control <--spend very little time here! | 3. You have no control <--spend no time here

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TinkerPDX
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Re: Buy individual stock to maintain my honor?

Post by TinkerPDX » Wed Mar 21, 2018 10:57 am

Bank error in your favor, collect $20k. You tried, you did the honorable thing. It’s a gift, I say pay it forward.

aristotelian
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Re: Buy individual stock to maintain my honor?

Post by aristotelian » Wed Mar 21, 2018 11:02 am

Buying their stock does not in any way give them back their money. It gives you ownership of a piece of their company, that is all. What would help them would be if you bought $10K of their products.

IMO, you alerted them to the issue and they were too incompetent to follow through. You may want to keep it in a savings account just in case they ever invoice you for it, otherwise take the money and run. If you want to restore your honor, donate it to charity.

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unclescrooge
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Re: Buy individual stock to maintain my honor?

Post by unclescrooge » Wed Mar 21, 2018 11:11 am

I don't think you owe them anything.

That being said, buying stock is not how you "return" money. Unless there's a new round of equity being offered, buying stock on the open market doesn't send the money to HQ.

If you wanted to give them money, you'd buy newly issued debt (and pray for default).

Just walk away.

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DaftInvestor
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Re: Buy individual stock to maintain my honor?

Post by DaftInvestor » Wed Mar 21, 2018 1:26 pm

I don't see how your reasoning works. Buying $10,000 in stock in the company is actually investing in the company - not anything like paying them back.
If it is tugging at your morale-code (sounds like it is since you are asking the question) simply write them a personal check and send it to "Attention HR" at the Corporate HQ address with a letter of explanation. If they chose not to cash it them at least you made an effort.
Alternatively you could donate the $20K to charity.

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htdrag11
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Re: Buy individual stock to maintain my honor?

Post by htdrag11 » Wed Mar 21, 2018 1:35 pm

+1. Donate the money to one of your favorite charities. As long as you can sleep well at night, that is all that matters.

In our daughter's case, there is no such luck. She had to write a personal check back to the company and ate the taxes. The check was promptly cased out by this Fortune 100 company. However, her sign on bonus with the current company made back 90% of it.

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Tamarind
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Re: Buy individual stock to maintain my honor?

Post by Tamarind » Wed Mar 21, 2018 1:46 pm

htdrag11 wrote:
Wed Mar 21, 2018 1:35 pm
+1. Donate the money to one of your favorite charities.
+2. IMO, the best thing to do with money you don't feel you deserve is give it away to help someone else.

Shallowpockets
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Re: Buy individual stock to maintain my honor?

Post by Shallowpockets » Wed Mar 21, 2018 3:23 pm

Well now. Since you want to do the honorable thing you might approach the future differently.
You cite two cases of this happening and then you state it has happened before. Obviously you are repeating yourself with these jobs. Perhaps in the future you should evaluate the job more carefully or you should have them hold any sign on bonuses until you actually reach the timeframe for which they are being given.
Otherwise as others have said, you are not responsible for any mistakes made in redoing these bonuses beyond you best efforts.

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JoMoney
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Re: Buy individual stock to maintain my honor?

Post by JoMoney » Wed Mar 21, 2018 3:53 pm

Unless the companies are doing a new equity issue, buying stock is not giving the money to the company, and even in the case of new issue it's still represents an outstanding debt or negative equity position that isn't helping the owners any. Buying the stock does not rectify your situation in any way.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Ancal
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Re: Buy individual stock to maintain my honor?

Post by Ancal » Wed Mar 21, 2018 4:14 pm

What about donating the money to charity, as others have suggested, but doing so in the name of the companies – and then writing to them saying they may deduct the $20k from their tax burdens?

michaeljc70
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Re: Buy individual stock to maintain my honor?

Post by michaeljc70 » Wed Mar 21, 2018 4:16 pm

barnaclebob wrote:
Wed Mar 21, 2018 10:27 am
Don't be silly. The corporate machine has many inefficiencies, its not your job to feel bad when one works out in your favor. You have done all you need to do.

My wife was taking a class that didn't meet the requirements for tuition reimbursement but the company paid anyway. It was a huge effort to get the company to acknowledge the issue, and for her to coordinate either a refund from the school or to pay it back herself.
This.

The plan to buy their stock sounds even more convoluted than their attaching a clawback provision and not having the policies in place for it.

Silk McCue
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Re: Buy individual stock to maintain my honor?

Post by Silk McCue » Wed Mar 21, 2018 4:53 pm

It sounds to me that the companies put this return of bonus clause in place in case they later choose to enforce it if their is a real problem with the employee. Absent such an issue they simply consider it a cost of acquiring an employee.

There is no issue of honor here, although it is clear that you conduct yourself honorably. The money is yours to do with as you see fit.

Cheers

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White Coat Investor
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Re: Buy individual stock to maintain my honor?

Post by White Coat Investor » Wed Mar 21, 2018 5:04 pm

Don't buy the stock. If they ask for the money, give them the money. If not, continue with your life, honor fully upheld.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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BolderBoy
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Re: Buy individual stock to maintain my honor?

Post by BolderBoy » Wed Mar 21, 2018 6:00 pm

White Coat Investor wrote:
Wed Mar 21, 2018 5:04 pm
Don't buy the stock. If they ask for the money, give them the money. If not, continue with your life, honor fully upheld.
+1. This is the best thing to do.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

michaeljc70
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Re: Buy individual stock to maintain my honor?

Post by michaeljc70 » Wed Mar 21, 2018 6:09 pm

I already gave my opinion on the original post above. I will say though, I think these clawback warnings tend to be more of just in case and are loosely enforced. Kind of like at the grocery store when it says limit 5 of x. They don't want you buying 50 of them, but if you buy 6 are they going to stop you? If you took the job and quit after a few weeks with the bonus and it seemed like you were gaming them, that is when they might demand the money. If you worked there 7 months and it didn't work out, they may just forget it.

likegarden
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Re: Buy individual stock to maintain my honor?

Post by likegarden » Wed Mar 21, 2018 6:27 pm

You can only do so much, and you did it. But I would keep the $20,000 in a CD to be ready to give it back in full, perhaps for 5 years.

I had a similar situation in the 1970s in a local bank, just received $500 over the counter, when the lights went out and bank's computer shut down. A week later I noticed that the bank had not deducted the $500 from my bank balance. I went to the bank's manager, asked that he deduct the $500 from my account, but they never did it, probably had already balanced their books. So I accepted that wonderful $500 gift. I did all I could do. If they ever came requesting the $500 back, I was ready to give it.

aristotelian
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Re: Buy individual stock to maintain my honor?

Post by aristotelian » Wed Mar 21, 2018 6:34 pm

How about notifying them in writing of your intention to pay them back within 30 days or you will assume you can keep the money. Copy the CEO/CFO or somebody higher up. If they do not respond, your conscience is clean.

VaR
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Re: Buy individual stock to maintain my honor?

Post by VaR » Thu Mar 22, 2018 1:33 am

Are you sure they're obligated to request the signing bonus back? Usually there is some discretion if you're "close enough". Employers generally don't want to the reputational damage from clawing back a signing bonus one day before the required term, for instance. Many would also prorate the clawback.

Some other factors:
1. Maybe they reviewed their clawback provision and determined that it's unenforceable in the state you're in?
2. Maybe their intention was motivational and not punitive. So they never intended to collect.
3. Maybe when they reviewed they figured out that calculating the amount or recharacterizing the bonus once clawed back was too complicated due to payroll taxes paid and taxes withheld.
4. Maybe they have an informal policy where below a certain amount they don't claw back signing bonuses.
5. Maybe since they haven't enforced the clawback policy uniformly they've decided that enforcing it at all isn't worth the cost to them.

Just some thoughts. I don't know if there's a statute of limitations on the clawback so I'd avoid donating the money to charity in case the company wants to claw back the money years from now. You might think about investing it wisely so it's there for them when they decide they want it.

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