eBay Plans Options Water Safety Course
by John Paczkowski
Posted on March 11, 2009 at 12:00 PM PT
Apparently, fear of a deepening recession alone isn’t enough to maintain tech worker loyalty these days–mounting job losses be damned. This week, Google (GOOG) repriced millions of employee stock options that had gone underwater as the company’s share price declined. Now eBay (EBAY) hopes to do the same. The reason: employee retention.
In a regulatory filing today, the company said it has asked shareholders to approve a plan to offer employees the opportunity to swap underwater stock options for restricted stock. “Like many companies, we have experienced a significant decline in our stock price over the last year in light of the current global financial and economic crisis,” eBay explained in its argument for implementing the plan. “Because of the continued challenging economic environment and the uncertain impact of our efforts to change our business, we believe these underwater stock options are no longer effective as incentives to motivate and retain our employees.”
And this may well be the case. That said, you’d think that the widespread and fast-mounting job losses in the tech sector would be enough to keep most folks still collecting paychecks coming in to work. Nice gesture, though.
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Comments
One would hope that any proposed re-pricing of “underwater” stock options would not apply also to those options held by members of the executive management committee (particularly “Titanic” Captain, Donahoe) whose actions have exacerbated the downward slide of eBay’s share price. Surely there has to be some penalty for these amateur marketers who made the stupid decisions of recent years; or is it going to be business as usual with the shareholders carrying the whole can?
Posted by Philip Cohen at March 12th, 2009 at 3:00 pm