Staggering Options?

from the might-make-sense dept

An interesting suggestion on how to change the way companies award stock options to their employees. Instead of setting the strike price based on the date they start, they should be staggered. So, some portion of the options are priced then, but the rest are priced later. The theory is that this helps a company during downturns (like now), so that the company doesn't need to reprice stock options, and employees have a better chance of seeing some value out of their options. The main problem with this idea is that it will suck in the good times... because people who would have gotten plenty of cheap options will instead find them to be more expensive. Maybe it's a negotiating point - the company can offer to price the options all upfront or staggered over time. Of course, any employee who choses staggered suggests that s/he thinks the stock is likely to decrease over time - so that might not be the type of employee you want to hire.

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