The new option plan will let employees whose stock options are “underwater”, or carry an exercise price higher than the current share price, exchange them for new options at existing prices. The arrangement, prompted by a 59 per cent plunge in the Google share price from its peak in late 2007, was intended to give workers “more incentives to remain at Google” and contribute to its success, the company said.
Option repricing proved controversial in the technology bust, when it was seen on Wall Street as a way to protect workers at a time when other shareholders were suffering. Responding in an interview on Thursday, Mr Schmidt said: “Would you prefer we had the Wall Street firm’s bonus model? That doesn’t seem a very good model to me.”
He added: “Part of the compensation here is stock – it’s how it happens in tech, it has to have some value in the long term.”
On second thought my reaction is to be thoroughly disgusted by these comments. I don't have the option to get MY strikes rewritten when my options go underwater, those are the rules of the game for everyone else. The stock went down 60% and the shareholders are feeling it, but management is saying that its compensation needs to remain whole? So shareholders need to fill the hole. This is a clear case of management against shareholders and management saying "suck it".
The part about more incentives to remain at Google is just utter and complete bullshit. With the recession, everyone is holding on to their jobs for dear life. This is not about "employee retention" this is about "executive compensation". Mr Eric wants his money.
Perhaps the more disturbing part for me is the smug "would you prefer we had the WS firm bonus model? this doesn't seem a very good model to me", just outrageous. "Some people are being anally raped by elephants, would you want that? I don't think it is a very good idea". This just adds insult to injury.
In fact he shouldn't be so smug about Wall Street, this kind of shareholder abuse is exactly what gets corporate america its bad rep. This is nothing more than highway robbery and shareholder hold up. Dump that sucker.