2019 PSP Results?

3/14/2022

Full Transcript:

2019 Shell performance shares are arriving at Fidelity now. Let’s break down what to expect.

First, let’s cover the basics. Performance share plans, PSPs, are awarded to a subset of employees each year during the individual performance reviews. The percentage of employees that receive them and the amount of shares they receive are both dependent on and increase with job grade. They are a conditional award with vesting subject to company performance over the next three years.

Let’s break down the 2019 results. For this example, I’ll use 100 shares to make the math easy to scale. The 2019 PSP vesting outcome is 67%, as Shell lagged its peers in many of the financial metrics. Therefore, of the 100 shares, only 67 of them vested. They vested on March 3rd of 2022 at a share price of $52.85 per share. 100% of this is considered income and is therefore subject to income tax. As this is a taxable event, this $52.85 is your cost basis going forward.

Also, because this is subject to income tax, Shell will withhold some shares for taxes based on your personal tax situation. For this example, let’s assume that Shell withholds 23 shares for taxes, and you are therefore left with 44 shares. Once these shares hit your Fidelity account, you can sell them, or you can keep them. As your income is already tied to Shell, be cautious of keeping too much of your portfolio in company stock.

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