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Strategies & Market Trends : Good Investment Theses: VALUATIONS w/ FUNDAMENTAL ANALYSIS
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To: Edwarda who wrote (76)4/24/1999 7:00:00 PM
From: Chuzzlewit  Read Replies (1) of 160
 
I have no problem with that idea. I will get to the implementation later.

But what you seem to be implying is that options are not actually used to put shareholders and employees on the same side, right? Because we see that when the stock price falls the employees do not suffer the consequence -- as we both know, options are repriced in down markets (companies like IBM, DELL, SEG, PSFT, etc.). So it seems to me that the compensation is treated more like an entitlement. Give the employee upside but put a safety net under him in case the stock hits the skid. If that's the case, your argument is that options bind the employee to the company rather than give him an incentive to perform exceptionally by putting him at risk-- golden handcuffs. Is that a fair statement?

CTC
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