Wednesday, June 07, 2006

Stock Option repricing - ethics did exist

There has been much written about companies repricing stock options so that they were apparently issued at the price on the lowest price day of a period. While this clearly did happen in many cases, there were companies which were highly honest. I remember when I joined Remedy Corporation in 2000, Larry Garlick, the founder and CEO, told me that my initial stock options would be at the price of the stock on the Monday I joined. He commented that it was a pity I had not joined a week before as I would have had them at a lower price. However, it never entered either of our minds to pick a different date and rewrite history to give me a lower price.

While I have seen management indulge in unethical behavior, I have also seen most managers not only stick to the law, but also be ethical in all their dealings. We must focus on instilling these values in people while they are young. Business School or a company is too late.

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