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Option Practices Continue to Shift.

Troubles in the tech sector haven't eliminated stock options by any means, but companies have been compelled to change some of their practices.

So says a survey conducted by Unifi Network, a subsidiary of PricewaterhouseCoopers, in conjunction with the National Association of Stock Plan Professionals. The survey of 113 U.S.-based public technology companies found that 84 percent have employee stock purchase plans, versus 62 percent of companies in other industries. Moreover, high-tech companies have begun to shift to shorter option terms and vesting periods, as well as more frequent grants, in an effort to enhance employee retention and to mitigate the issues associated with volatile stock prices.

Repricing options whose values have declined is likely to continue, says Ed Speidel, a director in the Unifi Network's executive compensation practice. But the market's slamming of many tech stock means that "it is likely that equity plan participation will be perceived to be a less important component of total compensation by employees if this downturn continues," he adds. In fact, 10 percent of the tech companies surveyed have moved to more frequent grants during the year, Speidel said.
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Title Annotation:executive compensation
Publication:Financial Executive
Article Type:Brief Article
Geographic Code:1USA
Date:Jul 1, 2001
Words:188
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