Insiders Get Do-Overs
from the not-really-fair,-is-it? dept
A good article in the Red Herring complaining about companies repricing stock options and other questionable stock practices with its executives. I’ve always complained about the concept of repricing options. I understand why companies do it, but the whole point of stock options is to incentivize employees to help make the stock go up in value. If the company is just going to reprice it, then where’s the incentive? More importantly, as the article points out, the regular investors who bought the stock out in the market don’t have any right to reprice their stock purchases. It’s as if insiders get to call a “do over” and get a better deal.
Comments on “Insiders Get Do-Overs”
While mega-payoffs from options are the incentive, quite often there’s a reasonable level of expectation from options that all employees have. Executives in particular have, in recent years, forgone bonuses in lieu of options. So as long as these options aren’t being repriced to values above this happy-point, I have no problems with this practice.