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Technology Stocks : How high will Microsoft fly?
MSFT 478.53-1.0%Dec 12 9:30 AM EST
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To: jonkai who wrote (71392)7/19/2002 6:01:25 PM
From: David R  Read Replies (2) of 74651
 
RE: and studies have shown that ESO's are not aligning employee rank and file interest to that of shareholders the same as cash does, or regular shares

I must disagree. MSFT continuously strives to maintain a workforce that is only the top 5% of all potential employees (for each area). To reach this goal, they set the screening to weed out all but the top 2%. The company is built upon the backs of some of the smartest, and most talented people in the industry (and hardest working). MSFT shareholders have benefited remendously from the highly motivated workforce that continuously puts in 60+ hour work weeks (to the tune of >> 1000% over 10 years).

RE: "worse, when the stock goes down, MSFT just "reprices" these ESO's by reissuing them at new lower strike prices so that all these rank and file employees are playing tennis with the net down, where the owners, the shareholders, get no such get out of jail free card....."

Each repricing comes with a restart/adjustment of vesting period, and/or a reduction in the number of shares. The purpose is re-motivate the employees. Nothing worse than having a bunch of options that are wothless.

MSFT is a good company with regards to ESO. The fortunes of the top executives are rise and fall with the company. The problem centers around executives who cheat shareholders by pump-and-dump shennanigans. The regulatiosn that need to be changed are the ones that address insider selling.
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