Repricing and Exchanges - The Craze that's just a Phase?

Posted by Dan / on 01/19/2009 / 0 Comments

I was wondering what everyone was thinking out the attention being paid to repricings and options exchanges.

Is all the hype really warranted?

I have seen estimates that as many as 400 companies may go to shareholders with repricing/exchange proposals early this year.  While this number sounds very high, we should all remember that reports show that between 6,000 and 10,000 companies have stock options at some level.

Recent articles claim as many as 80% of companies have underwater options. This means that between 4,800 and 8,000 companies are affected, but less than 10% are expected to perform the most drastic action.

Maybe we should focus on what the 90% are doing to weather this storm.  What are the best practices of companies who are NOT repricing.  Are they communicating more?  Are they offering other forms of compensation? Are they sitting on their hands and simply hoping for the best?

If you are one of the companies who is probably not going to reprice or exchange your options, please let the rest of know your plans for the next 6-12 months.

I look forward to hearing from ECE members about this.



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