Option repricing - 30 Mar 2009 - Financial Times

Pity
the humble technology worker. While they were working away at the next
modern marvel, the world economy tripped over a pile of foreclosed
American houses. The Nasdaq Composite index is now 45 per cent below
its peak, and stock options gurgle underwater. So, technology
companies, in a list that so far includes Google, Intel, Ebay, AMD and Motorola, have proposed granting new incentives to their staff.

Long
a favourite form of Silicon Valley compensation, giving employees the
right to buy shares in the future at a fixed price has a chequered
history. It is an excellent way to motivate staff when starting a risky
business with limited cash, as all concerned share in any success. Yet
companies have only been forced to recognise the cost of issuing
options on their profit and loss accounts since 2005, and during the
technology boom they were sprinkled on workers like confetti. In too
many cases, issue dates were illegally backdated to more favourable
share prices. And, after the bust, options were merrily repriced with
little regard for investor losses.