The stock market’s fall last winter, and its impact on 860 employees of Philadelphia’s largest locally run bank as it prepares to disappear, shows a downside to getting paid in stock instead of cash. It also shows how stock ownership doesn’t always tie bosses’ and workers’ fortunes closer.

At Beneficial Bank, since the formerly depositor-owned company began selling shares in 2007, management rewarded employees and work groups for hitting production goals by paying them bonuses in shares of the bank’s own stock.

It was an employee stock-ownership program - the kind that accountants call a KSOP, because it was part of each staffer’s tax-protected retirement account, or 401(k).

By last year, Beneficial’s KSOP reported holding 4.4 million shares, or more than 6 percent of the company.That’s when chief executive Gerry P. Cuddy said he was selling the bank for $1.5 billion in cash and stock to WSFS Financial Corp. of Wilmington.

Philadelphia-boosters were disappointed that the bank was being sold after failing to build sales and profits enough to boost its share price, which is what shareholder-owned companies must do to stay independent.

But for veteran Beneficial staff, there was a bright side. WSFS would pay for the deal mostly with its own shares, then worth a near-record $55 each. KSOP members and other Beneficial owners would trade their shares for WSFS stock at a fixed ratio (plus a little cash). If that price held, Beneficial employees would finally realize significant gains on the stock they had been awarded, which had lagged other bank stocks since the formerly depositor-owned bank first sold shares.

WSFS doesn’t have a similar stock-ownership program to roll the shares into. So Beneficial staff, including those who will be kept on by WSFS as well as those who will be laid off, retired, or transferred with a group of New Jersey branches to the Bank of Princeton, looked ahead to receiving WSFS shares in exchange for Beneficial’s, and moving them into personal retirement accounts, or cashing them in with gains to reward their patience.

But WSFS shares dipped on news of the deal, then fell more as U.S. stock markets declined in November and December, and haven’t much recovered.

By March 1, when WSFS concluded the deal, the buyer’s share price had fallen to $42, shaving 24 percent from its value when the sale was announced.

Adding to frustration, workers say, the plan’s trustee froze trading in Beneficial shares in KSOP accounts before March 1, to give it time to prepare for the transfer to WSFS. WSFS’ price has since fallen into the $30s (shares closed Friday at $39.07, up $0.14, or 0.36 percent).

The disappointing price and the delay started some Beneficial veterans wondering whether Beneficial and WSFS bosses had been similarly inconvenienced. But a look at the most recent SEC filings shows they’ve done all right. Indeed, as Beneficial’s merger filing with the SEC noted, Cuddy and other bosses “have interests in the merger that may be different” from those of other shareholders, including KSOP members.

As I previously reported, Cuddy’s board voted him $8.6 million in a special bonus for converting the company from depositor-owned mutual status to share ownership so it could be sold (board members also voted themselves $1 million each).

For actually selling the bank, Cuddy collected $9.2 million more, in cash and stock, including payments for Beneficial options valued at a guaranteed above-market price. He was also paid $2 million as chief executive last year, and was named a WSFS vice chairman for the next three years, during which he will collect $1.3 million for promising not to work for another bank within 50 miles, and then $3.4 million in severance when the contract runs out. Plus, WSFS pays for his insurance, and his membership at the Merion Cricket Club.

WSFS’ then-chief executive Mark Turner, now executive chairman, also did well: According to SEC records, he netted more than $13 million by selling WSFS shares in 2018. More than three-quarters of the sales took place from May through the day in August just before the Beneficial announcement, at prices of $51 to $55 a share. The rest were sold in September and October, at prices averaging around $48.

Turner was cashing out five-year options that the company had approved back in early 2013. The company announced last April that he was planning to sell them before they expire this year, using an SEC Rule 10b5-1 plan, a kind of blind trust for timing share sales that is designed to protect executives from potential allegations of insider trading.

That was after the two bank leaders had already started talking about a merger, over beers at the Union League in early 2018. But it was still “before combination conversations with Beneficial proceeded in earnest,” and before the deal was signed, spokesman Jimmy Hernandez told me.

How was Turner to know bank stocks would fall? WSFS does things “legally, ethically, appropriately and transparently. That is very important to us and to me, personally,” he told me. He still owns half a million WSFS shares and options worth more than $18 million, which he says is more than half his family’s assets, “accumulated over 22 plus years of my career at WSFS,” giving him common cause with ex-KSOP members who hold on to WSFS stock.

Hernandez noted that the Beneficial employees could sell or transfer their shares just as Turner did in September, when the price was already linked to WSFS’s own but before the big December drop.

Will WSFS shares rise again? The bank, now led by Rodger Levenson, was as much an overachiever on Turner’s watch as Beneficial was an underachiever under Cuddy’s. It’s betting it can boost sales and profits where Beneficial failed in Southeast Pennsylvania. That’s why WSFS is buying Beneficial, not the other way around.

Of course, if the share price stays depressed a while, the two ex-CEOs would still have the comfort of the millions they previously collected or (in Cuddy’s case) are promised under the sale terms. Which is more than the Beneficial veterans would be able to say about the depreciated stock in their bonuses.