Contribution #9: Bear Stearns’ Brutal Fallout

The story that leads into Chapter 13 is a prime example of investment in your own company’s stock gone bad. Since the fall of Enron, and the collapse on Wall Street, many employees have seen their entire life savings plummet. Even a well diversified portfolio can come crashing down when the stock market takes a nose dive, but imagine if your portfolio included upwards of 50 percent or more of your own company’s stock and suddenly your employee benefits are wiped away because of an unhealthy merger or a hostile takeover with your company. The goal of HR Managers is to inform employees about the certain benefits that come with their job and the potential risk involved with limiting themselves, in terms of stock, to their own company. Employee benefits are supposed to live up to their name, but if the employee is unaware of the potential risks involved with receiving and not receiving some benefits, it can be detrimental to themselves and their families. Many employees of private companies don’t have to fear the risk involved with company stock, so they are more concerned with social security, family-friendly plans, and retirement packages. Usually, those are set in stone with the terms of the contract and provide a worry free benefit to their employees. In the long run, it’s important for employees to understand their benefits packages and use them to the fullest extent, which must be communicated by the HR Managers.