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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Percival 917 who wrote (12110)12/5/1999 7:34:00 PM
From: Mike Buckley  Read Replies (1) of 54805
 
Joel,

Regarding the co-founders' salaries and stock options as it relates to affecting our share prices in Siebel's stock.

I'll be interested in Bruce's take on this, but I really don't understand your question. If you're thinking that the stock price would be higher today if the founding officers had taken a less valuable compensation plan, there's no cause-and-effect relationship that can be established.

If you're asking if the founding officers' compensation package is too high, my thinking is that all employees participate in a market. By that, I mean that if my employer could get someone to do the same quality job that I'm doing for half the price, it should. Can Siebel Systems get someone to do Tom's and Pat's jobs as well as they've done for half the price? You get to decide.

I think the major point of the article is that, for all practical purposes, the two founding officers essentially grant themselves the stock options. In reality, the board grants them. At least they grant Tom's if not Pat's.

There are lots and lots of privately held companies doing $5 million where the CEO (the owner) makes $500,000 or more a year. In that context, I'd say that i2's CEO is a below-market CEO. That has more to say about his approach to compensation than it has to say about Tom Siebel's approach.

Last, run the numbers on the amount of dilution created by Tom's and Pat's options. In other words, see if you care.

Hope this helps.

--Mike Buckley
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