Company holding on to bonus!

reduncle

Would be grateful for some advice! Husband is a mid-manager for a large insurance organisation. In April 2011 he received half of his bonus in his salary and the remainder was given to him as shares (he was not given a choice, this was mandated by the company, although apparently they only do it to "management"). He received no bonus this year. He is about to leave the company after 2.5 years service and has been informed that he "loses" his bonus shares as he is leaving within 3 years of receiving them. The company advised him that this is a FSA ruling and that he can't take the funds, transfer the shares into his pension fund or leave them as they are and take them at the end of the 3-year period. The value is not huge, but it is significant to us! The Union advised my husband that, as they have been told that this is a FSA ruling, he should probably just accept it.:cool: Any advice?

Judith_W

Have you found the FSA legislation for this as there may be an indication that they should get the cash value equivalent or something??

You could call ACAS?

marybelle01

Judith_W wrote: »

You could call ACAS?

Who appear to struggle with employment law half the time, so I have little hope of them knowing FSA regulations.

Surely the best thing to do is ask the employer for the relevant sections of the FSA regulations, and if necessary, the relevant parts of the company policy on this? Since they have refused on these grounds they must know exactly where they are?

reduncle

Thanks Judith W - contacted the Union Rep at work who was very reluctant to help - they felt that if the company are quoting FSA regs, it must be so.

Marybelle01 - thanks for the suggestion - will definitely approach the company asking for the relevant sections of FSA regs and company policy. I have looked at FSA guidelines and to be honest, feel that it's a little wooly with respect to my husband. He is not senior management and the amount we are talking about is not substantial - I couldn't find anything saying that the company are entitled to retain the shares permanently without making any remuneration. Additionally, this information was certainly not made clear when DH joined the company - he may well have delayed his resignation, if he has realised it!

DVardysShadow

Does he have the shares or was he actually given share options? If he was given the shares, he should sell them if they are publicly traded.

reduncle

Hi DVS,

They must have been share options as he has never received a share certificate. He has a letter confirming their value and that they are part of his bonus.

DVardysShadow

If the letter does not indicate that the shares were conditional, he should insist on having them. Has he been paid any dividend on the shares?

JCS1

reduncle wrote: »

Hi DVS,

They must have been share options as he has never received a share certificate. He has a letter confirming their value and that they are part of his bonus.

I suspect it will depend on the rules of the particular scheme, when I was involved with share schemes then options did lapse if a person resigned.

DVardysShadow

JCS1 wrote: »

I suspect it will depend on the rules of the particular scheme, when I was involved with share schemes then options did lapse if a person resigned.

I don't think this is options, otherwise OP's OH would have to pay money to exercise the options. Your point does however bring some clarity, because without conditions to exercise the options, I would say that the shares have been awarded outright.

aylithuk

tbh it wouldn't surprise me to have a clause like this.

I have something similar where my bonus, over a particular amount would be deferred over 3 years before paying out a lump sum each year. If i leave during those 3 years I lose what I've not been paid out

I didn't think it was an FSA ruling however.

reduncle

Thanks for all the responses. Just to advise further that DH has received 2 dividend payments to date. Bonus letter stated that "you have been awarded a total amount of £x. This bonus is made up of the following elements - a discretionary cash bonus of £x and an award of company shares and/or nil cost option to the value of £x". T&Cs state that shares will be held in trust until the 3rd anniversary, when they will vest. Although it states that your reason for departure will affect your share award, (DH is leaving of his own accord for a better offer), it does not state anywhere on his letter that he will lose the shares - just that they will be held in trust! How can the company then decide to just withdraw his shares?

Thanks for all advice.