You don’t like your job or the company, but you need the money.  Should you go or should you stay? This question is the essence of the “Golden Handcuffs” metaphor and describes many  in these chaotic times.  The metaphor has special significance if the decision is contingent on vested benefits, and a vesting period. It’s also a significant issue for financial advisors whose clients are contemplating unlocking the handcuffs.

VESTING

Vesting is a legal term meaning that you own something. It is commonly used in the context of employee benefits. Employers impose vesting periods to keep you motivated and committed to the company.

Employers may contribute benefits for your retirement plan, but you may not be vested in your plan for several years. (Seven years is not uncommon.) That means that you have to work for your employer for that “vesting period” before you legally own the company’s contributions, but you will always own your own personal contributions. Even after you vest, your employer may add additional work requirements until you can withdraw the funds.

Employee stock options may also have a vesting period. If so, you are required to work for your employer for that period before you own and can exercise your rights to buy shares of stock at the specified price. Similarly, some companies will reward key employees with “restricted stock” – shares of stock that you cannot sell until you vest, or until you or the company satisfy some stated goals.

Vesting also applies to last wills and testaments. Some stipulate a vesting period before the assets of the deceased are distributed to the beneficiaries.

THE LESSON

Vesting period can be like golden handcuffs. You may want to leave your employer for a new job, but since you have not yet vested, you will probably stay where you are. If it is a matter of months, then it may be an easy decision to stay. But longer periods require careful, and personal, cost-benefit analysis. How important is it to be unhappy in your current job, perhaps working for a boss you dislike, to vest in your employer’s retirement benefits? But just as there are golden handcuffs, there are golden opportunities. You may have an opportunity to leave a job you like for one you will like even more. The cost-benefit analysis of your vesting options with your current employer will then come into play.

Few companies change the world; still fewer company founders become industry icons. Microsoft and its founders, Bill Gates and Paul Allen, are among the exceptions.

Allen’s personal statement about his early years at Microsoft teaches us three important lessons:

First, he and undoubtedly other initial employees felt chained to their terminals, but those chains were gold plated. They made the decision to devote herculean efforts and countless hours to build a company they felt could change the world. Their commitment paid off in ways none of them could have imagined – for the world and for them. The lesson: Commitment is always voluntary; sacrificial commitment is driven by purpose.

Second, Paul Allen was diagnosed with Hodgkin’s lymphoma in 1982, and that diagnosis spurred him to question his devotion to Microsoft relative to what he might lose. The lesson: Gold-plated chains lose their luster when you see your life slipping away.

Third, Allen decided to be more “adventurous” and explore the world. He wasn’t removing the chains to live as a victim, bemoaning his diagnosis and waiting to die. To the contrary, he removed the chains and became an adventurer, an explorer and a philanthropist.

The lesson: When confronted with your mortality, stop making excuses for not doing what you want to do. Carpe Diem – seize the day.

Purpose, recognition of our mortality and living your dream, powerful lessons indeed. A computer programmer who changed the world created his own “program” because of those three lessons.

Thank you, Paul, for your talent, passion, and philanthropy, and may you rest in peace.