When Is Executive Sacrifice Not Much Of A Sacrifice?
from the nice-try dept
I've always had a problem with companies that reprice stock options. As I've pointed out many times in the past, it sort of defeats the whole point of stock options. The idea was to give employees a reason to work hard to build up the company. If they know you're just going to reprice the options if the company tanks, doesn't most of that incentive go away? Anyway, over at Red Herring (though, what the hell happened to the Herring's proof readers who are supposed to remove the random MS-inspired artifacts that are found throughout the article replacing apostrophes?) they have an article taking apart Foundry Network's "no executives allowed" stock option repricing. They got a ton of press for being such good corporate citizens because the execs weren't allowed to have their options repriced "keeping them in line with regular shareholders" while letting them better incentivize their employees. Except, when you look at the details, it turns out that Foundry's execs sold out tons of stock recently. The amount they gave up by looking like saints turns out to be almost inconsequential, compared to what they cashed out with. Not that the idea isn't a good one, but these guys aren't quite the corporate saints people are making them out to be.