And that big ball of dung that started rolling on Monday continues with more bad news for RIM and it’s employees. Apparently because of RIM’s stock granting snafu, their employees might take a huge tax hit – never good news. The Globe and Mail reports that 321 option grants issued between 2002-2006 were done so with “incorrect measurement dates”, putting 4.6 millions shares into the employees’ hands. These only account for 63% of options granted in those years.
Accounting and compensation experts said Tuesday the admission means many employees could be required to refile income tax statements and take a hit for any gains they’ve received from those options over the years. The tax bills could include not only the extra benefits employees received, but also penalties and interest on the money.
â€œIn many cases, what is often a minor transgression has triggered huge negative tax consequences,â€ says Ken Hugessen, an independent compensation consultant who helps companies create executive compensation plans.
Mr. Hugessen said at a company like RIM, where the stock price has soared dramatically in recent years, employees could have received an improper benefit of, say, 50 cents per share from the incorrect dating, but could be required to pay full tax rates on option gains of $70 or $80 per share.
RIM has not disclosed how much money employees made from the incorrect dating, nor how much tax hit they may be facing.