Erik Reuter wrote:
> But the way stock incentives are handled now is wrong. Matt already
> mentioned that they aren't accounted for properly which inflates the
> balance sheet. But I think a worse problem is that stock incentives used
> today are too short term (you can usually start exercising options in 2
> to 3 years, sometimes immediately for some executive packages). It is
> demonstrably possible for the executives to defraud the market and drive
> the price up, profit from it, and then be done with it by the time the
> fraud comes to light. If executives were prevented from selling stock
> or exercising options for, say, 10 years, then they would have a strong
> incentive to guarantee the long term health of the company. Since fraud
> can reasonably be expected to be found within 10 years, executives won't
> be likely to try to profit that way, since the stock price will drop
> before they can sell their shares.
What do you think about stock options for other employees? For example,
employees with fairly good salaries who are rewarded with stock options
for good performance, but who aren't managers of any stripe? Would it
be reasonable to allow them to exercise their options sooner than the
executives could?
I like your idea regarding the executives. I just don't think it should
be applied across the board to ALL employees given stock options,
personally.
Julia
