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Missed the Option Bandwagon?



February 23, 2008 – Comments (3)

I have found option calculations for how much has been robbed from investors completely and utterly shocking, but, as if that wasn't enough, here's an article about repricing options

How insane is this one... "The industries most underwater include home builders, health-care services, computers, media, financial services, retail and semiconductors."

Let me get this straight, these industries are laying off workers like crazy, so much so that a financial conference last month looked more like a job fair given that 1500 out of 6500 participants were handing out their resumes and investors who've lost a bundle on their incompetence should be concerned about the company's ability to retain employees?

Seriously, if, and that's a big if, there is an employee retention problem, raise the freaking wages, but this stealing with no limits from investors to line executive's pockets at an average wage over 600 times the rest of get has got to stop. 

It is high time companies were regulated that they have to get 50% or more of all stock to vote for incentives above 10 times the median wage.  Then you know what investors really think.  The current system has zero hope of allowing investors to stop this massive transfer of their investment into executive pockets. 


3 Comments – Post Your Own

#1) On February 24, 2008 at 2:14 AM, Tastylunch (28.66) wrote:

I agree 100%.Without check and balances this bidding war for top execs is just going to get worse.

Part of the problem is that money companies never disclose how much their top ppl totally take in from the companies. 

Along with what you propose I think all publicly traded comapnies should be forced by the exchanges to disclose all compensation their execs receive, including the perks (houses, loans form company, pirvate jets etc). If they don't comply, then they should face  the risk of delistment. That ought to get compliance.


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#2) On February 24, 2008 at 8:49 AM, dwot (29.50) wrote:

Tastylunch, I don't think people yet appreciate the magnitude of the stock option dilution problem and how much of earnings that is sucking out of the company, or that the way it is set up, executives are driving companies to the ground rather than making decisions that will make the companies stronger long term.

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#3) On February 24, 2008 at 6:31 PM, DemonDoug (30.73) wrote:

this is why many people prefer to invest in blue-chip companies with long histories of being shareholder friendly (WWY, PG, MO, JNJ come to mind).

tech is the worst with options.  I bet CSCO would be over 40-50/share at this point if they never awarded one option.  One reason I'll never own CSCO. 

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