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Wednesday, December 13 2006 @ 07:28 PM Central Standard Time
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Google employees have been given the choice of selling their stock options through an online auction hosted by Morgan. The move was an attempt to attract and retain talent in the company at a time when the stock value of a Google option is almost $500..
The exchange is the first of its kind. Google employees will be able to sell options that are eligible for sale. This will give its employees a way to put value into their options. The possibility of exchange is open to all employees except for the top 13 executives.
``What Google is doing here is capitalizing on the importance of options to employees,'' said James Glassman, a fellow at the American Enterprise Institute, a think tank in Washington. ``That makes all the sense in the world.''
Aside from giving its employees the option to sell their stock, it has also provided its employees with a service that will enable them to see the worth of their un-vested options.
The exchange aims to bolster security and morale of Google employees who might be having issues regarding the possibility of not being able to enjoy the gains enjoyed by their former colleagues who had been awarded options close to the company’s initial public offering price of $85.
According to Ted Buyniski, a compensation consultant at Radford Surveys+Consulting, a unit of Chicago-based Aon Corp., “the real win for Google is that it restores perceived value in the face of a $500 stock.'' He continued by saying that this new practice of Google might well signal the beginning of a new trend.
This new procedure of Google follows that of Microsoft Corp. and Cisco Systems, Inc. Microsoft allowed its employees to sell some unprofitable options last 2003. Cisco, on the other hand, plans to create and sell financial contracts for valuing stock options for accounting purposes. The difference of Google, however, is that the exchange will somehow have a permanent status in the company. Microsoft’s plan is only good for a limited time and is only available for a single bidder.
Ma. Roma C. Agsalud
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