SkyWest Employee Stock Purchase Program and 401K

[at7driver]

check your box on ourasa, it was posted either yesterday or today... same deal as SKW

 

[JustaNumber]

This is a loss of potentially several thousand dollars a year. This sucks!

 

[COOPERVANE]

I like how they frame news like this.

"In our continuing effort to offer the most advantageous employee benefits blah, blah, blah"

"ASA will now be an all jet fleet for the first time in 30 years!!" YEA!

They love to speak to us like children.
And will you please STOP with the FAQ format? The program has JUST been announced, there can't be any FAQ!!

 

[CFI2766]

it doesn't affect this period. it will work the same for this purchase period, ending 12/31. you can go to the site and cancel anytime. open enrollment has nothing to do with it.

Wellllll...NO.

It might work differently on the SKYW side of the house. Although the ASA version does allow you to 'change' the % (and therefore, cancel contributions) at any time, the changes will only take affect at the purchase time, either 1 Jan or 1 July. So even though you can request the change through 'Computershare' (something tells me this was the lowest cost provider of this service...) at any time, the change will not be made until the end of the 6 month period.

The changes will not touch any amount purchased during the 1 July 08/1 Jan 09 time frame. However, the 1 Jan 09/1 July 09 time frame will now be limited to only a 5% discount from the closing share price at the end of the period.

The value to the ASA/SKYW employee has been dramatically reduced.

 

[CFI2766]

One more thing, I saw nothing that stated definitively that we would be getting the option to invest in a Roth 401k. For the majority of the junior folks at ASA, the ability to participate in the Roth version of the 401k would be a very good thing.

I saw terms like '...we continue to explore in detail the OPTION to...' and 'we HOPE to be able to...', but nothing concrete.

For recap, in case anyone is wondering, its been a long, long time since we've heard any good news at ASA.

This was clearly the least painful, at least to SKYW, method to cut payroll costs. No doubt, it stinks. That being said, I strongly prefer this to any of the more painful means, to both the managerial types and to the work force, to reduce payroll costs.

 

[aerobat21]

I like how they waited till after open enrollment to tell us. Had I known I would be keeping that money in my check.

you can still bail

 

[Andy Neill]

I have been hearing rumors that the ESPP and 401K at SkyWest changed today. Anyone have details? Are they good changes? What kind of approval did the company seek from the pilots/employees?

That's a shame on the ESPP. That was one of my favorite perks. I was in it to the max. Still, even with only a 5% kicker, that amounts to a 21.1% rate of annualized return on your deposits - not bad.

I suppose some of this is offset by the increrase in Performance Rewards so it may be a wash for many.

 

[SpyFlysDOTs]

That's a shame on the ESPP. That was one of my favorite perks. I was in it to the max. Still, even with only a 5% kicker, that amounts to a 21.1% rate of annualized return on your deposits - not bad.

I suppose some of this is offset by the increrase in Performance Rewards so it may be a wash for many.

Fuzzy math...

 

[Andy Neill]

Fuzzy math...

Hardly. You get 100/95 benefit for 5.26% right off the bat. But that's in a six month period so it's 10.5% annuallized. But the average money involved was only half of the final amount so you are getting an annualized 21.1% return on your monthly investments.

In other words, if you were given the choice to put your money in a savings account with an APY of 20% or do the ESPP, you should choose the ESPP.

Did that shave some of the fuzz?

 

[SpyFlysDOTs]

Andy, do you realize this is on Selling price ONLY not the better of the two prices?

 

[skywav8r]

When I was at Skywest I bought a truck with my ESPP and made enough for a good down payment on a house. 15% to 5% sucks but its better than a stick in your eye. I watched the trends in the stock price for years. For the three weeks following the 6 month stock purchase the stock drops about 5-10%. Between 3-5 weeks post purchase the stock is even money or higher. i.e. don't sell the minute you get it. Too bad you ASA guys weren't around to enjoy the stock splits and the jumps from the teens up to $40. $$$$ Bottom line, if you have the money, the ESPP is still a good thing.

 

[Chairman]

Sure won't beat Jan 06 when the return was 79% and the company ran out of stock to issue. Was a great perk huge loss in the so called "Total compensation package"

 

[Andy Neill]

Andy, do you realize this is on Selling price ONLY not the better of the two prices?

I do indeed. It may be helpful if you could show me where my math is in error.

 

[Roger Dat]

I do indeed. It may be helpful if you could show me where my math is in error.

This money is coming out of our checks after taxes, not before.

At least it is over here in Atlanta.

 

[Andy Neill]

This money is coming out of our checks after taxes, not before.

At least it is over here in Atlanta.

Very true but that doesn't affect the return rate I stated. By the way, there is a way to juice the total you get from SKYW Inc by setting your 401k levels to the right spot.

 

[Roger Dat]

so help me out here. If i get a 5% discount on a stock and buy it, how does that make it 21%.
Why not just 5%

I'm not sure I get it

 

[Andy Neill]

so help me out here. If i get a 5% discount on a stock and buy it, how does that make it 21%.
Why not just 5%

I'm not sure I get it

Step by step. Let's say you are putting in $100 per paycheck (every two weeks) for a total of $1300 over the course of 6 months. At the end of that time, you buy 100/95th times $1300 worth of stock ($1368.42) for $1300. That is a benefit of 5.26%, right?

Now that benefit was realized on an average of $650. In other words, you didn't put in $1300 at the beginning of the period. You deposited it $100 every two weeks. So a benefit of $68.42 on an average balance of $650 is 10.52%.

Finally, this was the return on a six month period. Annualized, that rate of return would be 21.14%. In other words, this is a better deal than depositing $100 per month for 6 months in a savings account that promises an APY of 20%.

Does that clear things up. If not, give me your figures.

Let me ask this. If you don't do this to the max, what are you going to do with the money that will deliver that much return?

 

[Roger Dat]

Alright now, got someone smarter than me to explain what you were saying. Now it is clear. Thanks

What were wqe making when we got a 15% discount. I was putting in the whole 15% of my check....

 

[SpyFlysDOTs]

Did you subtract the 15% tax on your profit?

 

[Andy Neill]

Did you subtract the 15% tax on your profit?

OK. If you want to play that game, 15% of 21% is 3.65% so the return is only 17.35%. What are you doing to get that kind of return? The tax on saving interest is more and the return is much less.

If you don't want to go with this, point me in a better direction. I can't handle all this negativity. I'm in a success mode - not a victim mode.