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If Only The Guardian Understood Anything At All About Money



Wouldn’t it be a lovely world if those who wrote – and edited – The Guardian had even a basic understanding of this capitalist free marketry that they so rail against?

Like, for example, the difference between a stock option and a stock grant?

The online furniture retailer Made is giving share options worth more than £10,000 to all its staff after the company benefited from new shopping habits forged during the lockdown.

Coronavirus restrictions, coupled with the shift to working from home, proved the catalyst for a boom in home furnishings sales, with consumer cash usually spent on foreign holidays and socialising funnelled instead into interior makeovers, sofas and desks.

The way that’s written that’s an absolutely horrible deal for the staff. Yet the G seems to think it’s lovely.

Sales had been “extremely strong” in 2020, said Philippe Chainieux, Made’s chief executive, and the decision to give shares to its 650 staff was an acknowledgement that it would not have been possible without them.

That’s great, that’s absolutely lovely though.

The difference is that a share option is the right to purchase shares at some price fixed today but at some date in the future. It is almost always true that the price fixed today is today’s price. This is more formalised in the American system – tax laws etc make it so – but it’s usual in the UK as well. Our shares are worth £1 today, so, to incentivise you we’ll let you buy shares in, say, three year’s time at that £1 price of today.

Given that the business is going gangbusters you’ll make out fine.

But note what happens here. You want that price to be fixed at a low point in the business’ fortunes. What you really don’t want is the price to be fixed coming off the boom of a one time and once only event like the pandemic. Setting the options price just after a 170% boost in sales just isn’t what you, as the option grantee, want.

All Made staff, barring senior management, are receiving the same number of share options, which vest in equal tranches over the next three years. They are estimated to be worth the equivalent of six months’ salary.

Given that options are granted at current stock prices they have no intrinsic – although they do have a time and we can get more complicated with Black Scholes and all that – value at all.

What’s actually happening is that the staff are being offered share grants. Here are some shares. For freebie. At the moment you only nominally own them. But next year one third of them really become yours to own. Even sell if there’s a market you can sell them in. And the year after another third become really yours etc.

D’ye see the difference? An options is the ability to buy at today’s price. A grant is here’s the stuff itself.

Wouldn’t it be wonderful if those who wrote The Guardian grasped these basic points about the system they so despise?



  1. Doesn’t seem like a bad deal. First, staff are getting these for free. Second, today’s share price should reflect expected future earnings, if this year was a one-time bonanza but future earnings are expected to be considerably less the share price should reflect that. If the options are worth 10k based on one of the recognized methods and reasonable assumptions, they’re probably worth 10k.

  2. Yes of course. However, where did the clueless reporter get the information for the article. Did the company issue a garbled press release or did the clueless reporter screw up a perfectly sane notice from the company.

  3. Ummm – what about income tax ?

    If they were options, there is no tax to pay on the grant, and income tax only to pay on the gain (i.e. current price – option price), if any, when exercised (regardless of whether the resulting shares are sold or not).That sets the base price for future capital gains assesssment.

    If they are a grant in shares, are they taxed now, for shares that might prove worthless before they can be taken and sold?
    Or taxed later, and if so when? On th emarket price at grant, or market price when accessible?
    If the shares plummet in value, post Covid, how do the recipients avoid being double-stuffed with a big tax bill on worthless paper?

    Not a pointless question. I understand the USA system taxes both share grants and share options at grant, so the employee gets nailed with a current tax bill for something that is currently worthlesss and may remain so.


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expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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