Time Inc. people were told late last week that any unvested Time Warner stock options will be forfeited once the publishing operation is spun off from Time Warner and begins trading as its own company on June 6.
Stock options are usually made to build loyalty among long-term employees and to reward them when the company succeeds.
But Time Inc. managers and executives last received options back in 2012.
One source said he believed that their Time Warner options vested immediately at the time of the spinoff.
“There were always three ways to build value at Time Inc., your salary, your bonus and your stock options,” said one source. “Now they are taking one of them away.”
Twenty-four hours after the stock option forfeit letter went out, the company issued another memo to its 7,900 employees saying that some of them will see their TWX options replaced by new Time Inc. options going forward. A Time Inc. spokeswoman responded to Media Ink to say the same.