The offer would be open to all employees excluding senior executives. While the move might be an incentive to hard-working employees, it could draw opposition from some shareholders who are not being similarly compensated.
Having cut some 20, jobs since , Intel said it cannot afford to lose staff crucial to certain projects. Securities and Exchange Commission on Monday. Intel said the plan should be cost-neutral since it had accounted for the cost of the options when they were granted.
Chairman Craig Barrett told Reuters he anticipates Intel shareholders will see the big picture, and the value of retaining key employees, particularly in troubled economic times. Intel shares rose almost 6 percent on Monday, riding a bullish wave in broader markets. So far, shareholders do not appear to be troubled by the plan, since they have more important strategic concerns including the status of microprocessor demand and the health of the personal computer market, according to Stifel Nicolaus analyst Cody Acree.
Intel also said it planned to freeze all employee salaries including those of top executives, and reduce contributions to its employee retirement savings plan and employee stock purchase plans -- which together should lead to significant cost savings in Companies often offer stock options to employees as a way to motivate and retain staff. Motorola is also going to ask shareholders to approve a repricing of its employee equity awards, according to a regulatory filing on Monday.
Intel said 87 percent of its nearly 84, employees are holding options, and that essentially all of those options -- 99 percent -- are underwater. Intel said it would determine the price of the new options at a later date and that they would be equal to the market value of an Intel share on the date they are granted. The options would be subject to a four-year vesting schedule and seven-year contractual life, Intel said. All quotes delayed a minimum of 15 minutes.
See here for a complete list of exchanges and delays. Answers On Innovation Thomson Reuters. Intel seeks to swap worthless stock options. Amid political turmoil, Wall Street clings to mantra. Pleas to flee, a desperate video: Inside the oil industry's purge. Pictures of the year.
The Thomson Reuters Trust Principles.More...