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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Lars who wrote (1578)	10/12/1998 10:40:00 AM
From: Trebor	Read Replies (1) \| Respond to of 15132

Re: * LTC article * Interesting. When people ask me how I'm doing in the market these days, my standard reply is that compared to those Nobel prizing winning guys at LTC, I'm doing brilliantly.

To: Lars who wrote (1578)	10/12/1998 5:32:00 PM
From: Lars	Respond to of 15132

* DJIA and other indexes * NASDAQ: 1546.08 +53.59 +3.59% S&P 500: 997.71 +13.32 +1.35% Dow Jones Industrial Average: 8001.47 +101.95 +1.29%

To: Lars who wrote (1578)	10/12/1998 5:35:00 PM
From: Lars	Respond to of 15132

* 10/12 Critics blast option price changes * By John Hanley NEW YORK, Oct 12 (Reuters) - While shareholders have been bloodied by the stock market's recent sell-off, many corporate executives have been shielded by adjustments in the prices of their stock options, prompting critics to call for changes. Stock options, which can account for up to half of a chief executive's compensation, were designed to align the interests of managers with those of shareholders. It seemed to be a good idea with stock markets booming for much of the 1990s. Yet with stocks falling, re-pricing -- or lowering the price at which the options are awarded -- reduces the risk for executives but does nothing for average investors. "Re-pricing is the latest and most significant indication that the system for overpaying CEOs is rigged," said Bill Patterson, director of the AFL-CIO's office of investment, which works with pension funds that handle about $325 billion in assets for their 7 million unionized members. "Not only can they keep overpaying themselves, but then they can change the rules of the game when the old rules don't give them these beefy packages," he said. "I think this is going to be the flashpoint of the '99 season." Several watchdog groups say they will challenge corporations to disclose more details on their stock option plans and to bring any re-pricing plans to a shareholder vote. More companies are expected to announce re-pricings in the coming earnings season after a handful of noted examples, including troubled franchising giant Cendant Corp. and Ziff-Davis Inc., the computer publisher and trade show organizer. Many companies say they must re-price options to keep top executives. But critics say executives benefited from a steep rise in stock prices that had less to do with their companies' performance than with the broad stock market boom. "The idea of a stock option is supposed to align the interest of management and shareholders, but re-pricing is their way of saying 'Heads I win, tails I still win'," said Nell Minnow, a principal at Lens Inc., an investment firm with $100 million under management that has criticized repricing. "You can lose everything, whereas they are just losing the cherry on the sundae," she said. Minnow and other activists said stock options should be indexed so the executive is either rewarded or punished based on how the company is performing compared with its peers. That would prevent what many critics call excesses in options. For example, executives used to get options on tens of thousands of shares. But now they often get options on 1 million shares that yield a $1 million gain from a $1 rise in their stock price. One of the nation's biggest institutional investors, TIAA-CREF, or Teachers Insurance and Annuity Association-College Retirement Equities Fund, said it is generally opposed to re-pricing. TIAA-CREF's pension system has $223 billion in assets under management from 2 million workers and retirees from U.S. universities, colleges and research organizations. "To change the rules because the stock market has gone down takes away the rationale that was previously expressed that if you as a shareholder do well it is appropriate for executives of the company to do well," said Peter Clapman, senior vice president and chief investment council of TIAA-CREF.