Week of March 16th
What's News is a regularly updated summary of news stories, typically related to compensation, that we are following, find interesting, or find baffling.
Week of March 16th…
Lost this week among all of the AIG bonus calamity (our thoughts to come on this shortly) were a number of companies seeking shareholder approval for option exchanges:
- Google announced that approximately 93% of its underwater options granted to employees will be exchanged on a one-to-one basis. Employees typically receive fewer number of options when they surrender their underwater options because they are trading in something they view as worthless for something of value, which is why many feel Google’s one-to-one exchange is quite a generous move.
- Starbucks Corp. won shareholder approval for their proposed option exchange.
- Ebay Inc hopes to allow employees to exchange their underwater options for a lesser number of restricted stock units.
- Eligible Motorola Inc employees can surrender their underwater options for either a lesser number of options or restricted stock units.
Common arguments that companies use when requesting option-exchange programs from shareholders include:
Treasury Department’s New Pay Restrictions
New restrictions on executive compensation have been issued by the Treasury Department in an effort
...to strike the correct balance between the need for strict monitoring and accountability on executive pay and the need for financial institutions to fully function and attract the talent pool that will maximize the chances of financial recovery and taxpayers being paid back on their investments.
US Department of Treasury (TG-15) , February 4th, 2009
Essentially, companies that receive assistance through programs that are widely available to most firms and have pre-determined terms and conditions will not be affected. The Treasury Department identified the Capital Purchase Program as one such program in which participating
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Recent Posts
- American Bar Association Annual Meeting
- The Changing Face of Executive Compensation in IPO Companies
- Issues & Alternatives For Underwater Stock Options
- Week of March 16th
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