Bringing stock options back to the surface

As markets fell, employees’ stock options slid right “underwater”.
By David Brown
|Canadian HR Reporter|Last Updated: 07/21/2003

After a lengthy slide in the markets, many firms that got into the custom of compensating employees with stock options, now find themselves in an awkward position.

Their stocks have slid below the option price — gone underwater, as they say — and now for all intents and purposes, are worthless. Employees whose options vest would find themselves selling them for less than they paid.

As a result, some companies have had to revise the trigger price for their stock option plans.