Clever Solution to Option Woes

Dyre Straits · Jul 11, 2003, 06:41 AM

Jul. 10, 2003 PT

Microsoft's decision to stop handing out stock options to employees is a clever solution to a gigantic morale problem, analysts say. It's the equivalent of making lemonade out of lemons.

Most institutional investors and accounting experts lauded the world's biggest software company for kicking the tech industry's bad habit of using stock options to attract employees. Others said it was a brilliant move to hearten tens of thousands of employees who have given up dreams of instant stock-option fortunes.

"Options recently have actually caused problems between employees and haven't been a source of the incentives and retention they were intended to provide, because of stock prices," said Rob Enderle, an analyst with Forrester Research. "In hindsight, this is going to be seen as a way of addressing a number of problems."

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Jul 11, 2003, 06:41 AM	#1
Dyre Straits HH Old Fuddy Duddy Join Date: May 2002 Location: Georgia, USA Posts: 14,205 Rep Power: 216 System Specs	Clever Solution to Option Woes Jul. 10, 2003 PT Microsoft's decision to stop handing out stock options to employees is a clever solution to a gigantic morale problem, analysts say. It's the equivalent of making lemonade out of lemons. Most institutional investors and accounting experts lauded the world's biggest software company for kicking the tech industry's bad habit of using stock options to attract employees. Others said it was a brilliant move to hearten tens of thousands of employees who have given up dreams of instant stock-option fortunes. "Options recently have actually caused problems between employees and haven't been a source of the incentives and retention they were intended to provide, because of stock prices," said Rob Enderle, an analyst with Forrester Research. "In hindsight, this is going to be seen as a way of addressing a number of problems." Read More