Newspaper article THE JOURNAL RECORD

Payment in Stock Options

Newspaper article THE JOURNAL RECORD

Payment in Stock Options

Article excerpt

Cash is no longer king in Silicon Valley. The most favored currency of the high-tech realm is the stock option.

Software engineers and other employees increasingly are willing to live on starvation salaries if they can join a small company with a promising new technology that has recently gone public or has a hot stock offering in its future.

The rewards for short-term sacrifice can be astonishing, especially in a bull market for stocks. Take Siebel Systems of San Mateo, Calif. The sales automation software company held its initial public offering (IPO) last year and was the nation's fifth best- performing new stock, zooming from $8.50 a share to as much as $27. Founder and Chief Executive Tom Siebel, 43, owns about 40 percent of the company, a stake now worth a couple hundred million dollars. What's really unusual, however, is that nearly a third of the company's 220 employees suddenly find themselves millionaires as well, at least on paper. Stock options are increasingly being offered to entire workforces. "About 800 out of 8,000 publicly traded companies offer stock options to most of their full-time employees," said Corey Rosen, executive director of the National Center for Employee Ownership in Oakland. "This is something you didn't hear about five or 10 years ago." Little companies are not the only ones jumping on the options-for- all bandwagon to spur workers. Chipmaker Intel Corp. recently announced plans to offer stock options to its 50,000 employees. In November, Bank of America did the same, providing options to 85,000 employees, including some part-time workers. Other industry leaders, including Gap Inc., Pepsico, Walgreen Co. and Westinghouse, also offer broad-based options programs. Granting stock options has become standard operating procedure among high-tech companies. …

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