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Microsoft to abandon practice of awarding stock options
Washington, July 13: Corporate America`s struggle to win back investors jaded by financial scandal got a jolt last week when Microsoft Corp said it would jettison stock options, once the golden egg of the internet age but now a tarnished symbol of fat-cat greed.
Washington, July 13: Corporate America's struggle to win back investors jaded by financial scandal got a jolt last week when Microsoft Corp said it would jettison stock
options, once the golden egg of the internet age but now a tarnished symbol of fat-cat greed.
Starting in September, Microsoft will abandon the practice of awarding stock options to executives and workers, giving them the chance to earn actual shares instead, the
company said July 8.
Microsoft added that it would account for stock-based compensation as an expense on its balance sheet for fiscal 2004, which began July 1. The company took the decision after employees expressed "angst" about the options plan, chief executive Steve Ballmer told reporters.
Stock options give bearers the right to buy shares at a fixed price over a specified period, essentially gambling that the price will have risen by the time they convert the options into actual shares, which they then keep or sell.
In recent years, however, Microsoft shares have fallen.
The announcement also came amid pressure from investors and regulators alarmed by a plague of US corporate scandals involving management chicanery and revelations that bosses had enriched themselves even as they laid off workers and misled shareholders savaged by the markets. "All firms are now looked at with suspicion, so what might be considered the smarter ones are trying to get out ahead of that," said Randall Dodd, director of the Washington-based research group financial policy forum.
Bureau Report
Microsoft added that it would account for stock-based compensation as an expense on its balance sheet for fiscal 2004, which began July 1. The company took the decision after employees expressed "angst" about the options plan, chief executive Steve Ballmer told reporters.
Stock options give bearers the right to buy shares at a fixed price over a specified period, essentially gambling that the price will have risen by the time they convert the options into actual shares, which they then keep or sell.
In recent years, however, Microsoft shares have fallen.
The announcement also came amid pressure from investors and regulators alarmed by a plague of US corporate scandals involving management chicanery and revelations that bosses had enriched themselves even as they laid off workers and misled shareholders savaged by the markets. "All firms are now looked at with suspicion, so what might be considered the smarter ones are trying to get out ahead of that," said Randall Dodd, director of the Washington-based research group financial policy forum.
Bureau Report