Hi Mindmeld, re options, if we can continue briefly
I fundamentally have a difficult time with the concept of re-pricing stock options.
If options are indeed a way of helping employees share in the fruit of their labor.... well they get to share. Not just take a 100% beneficial stake. As a shareholder you get the downs as well as the ups, and it's nice to know that the sailors don't have first dibs on seats in the lifeboats.
Second, if they are indeed "extra" compensation, then make the cash payable and account for it properly. Not in some pyramid scheme that ends up with shareholders looking at a value to cost-base ratio less than one.
Third, numerous studies show that a stronger motivation for "top talent" to leave is internal inequity, not external inequity. It is key that top talent is treated "better" than bottom talent within the org. Not necessarily better than that other patch next door. Keeping up with the Joneses leads to wage inflation which is bad for everyone.
Fourth, top talent is smart. They don't necessarily want to pay "newbie tax" on their productivity. The bleeding of staff is not over. A great deal of their ability to contribute is often essential domain knowledge, including how the organization functions. Go somewhere else and they may be "mediocre" talent for a while. Man, I'd sure like to be top talent underpaid than mediocre talent fired. Oh, and severance tends to be based on length of time employed. The words "I Quit" can be very expensive!
Finally, would you pay $25 for Cisco stock today? No. Why is it that you won't pay more for the stock than it costs to acquire it? 'Cause you can get it cheaper? Hmmm... Same ruthless thinking goes towards those people you were "repurposing" a while back. Compensation is like that too.
This of course is in my perspective as a shareholder.
If I put my employee hat on then of course I want stock options. The more the merrier. And I want all of my underwater options priced above the waterline. And I want a raise. And I know I'm top talent <g>. And I want my job tomorrow. And I want my pick of assignments and I want my nice perks and pampering. And I want, I want, I want....
Somewhere in between these views is an appropriate balance.
So market conditions being what they are, I think now is not the time to be re-pricing options just yet.
John. |
