Today’s Federal Register.
The Boston Globe reports today, regarding Microsoft’s decision to end its stock option program: “No rush yet to abandon stock options: Firms that hope to grow see them as worker lure.” The article reports that “[w]hile some area technology companies say they are considering a plan to phase out stock options in favor of more stable restricted stock awards, most said they did not plan to change the way they compensate employees in the immediate future.”
USAToday, however, reports: “Citigroup doing away with stock options.”
Lisa Bowman for CNET News.com writes a very good article discussing the future of stock options via ZDNet.com entitled, “Stock options: End of an era?” The article reports that, based upon an internal memo, Microsoft employees at a certain level–who would normally be given 1,320 options–will get 325 restricted stock awards under the new Microsoft program. The article reports compensation experts as saying that the award is in line with a typical industry ratio of one share grant for every three or four options. In addition, the article quotes Martin Staubus, director of consulting for the nonprofit Beyster Institute for Entrepreneurial Employee Ownership, as stating that companies will increasingly turn to a “smorgasbord of incentives–including options, stock grants, cash and even souped-up retirement plans–rather than follow any single trend as they did with stock options in the 1990s.”
Today’s edition of the Wall Street Journal provides this article by Matt Murray and Lee Hawkins Jr., regarding House and Senate bills pertaining to Medicare prescription drug benefits: “Employers Will Face Many Choices, Including Trimming or Cutting Out Prescription Programs for Retirees.” (Subscription required.) The article reports that the “Congressional Budget Office has estimated that 37% of retirees now covered by a company plan would lose employer-provided drug benefits under the Senate bill, and 31% under the House proposal.”
Also, this by Mick Wingfield from the Journal: “Shift in Stock Options May Be At Expense of Accounting Purists.” (Subscription required.)
Finally, Alwyn Scott for The Seattle Times via NewsAlert.com has this article: “Some Analysts Fear Long-Term Consequences of Plan to Erase Pension Shortfalls” The article quotes some as saying that the proposed Bush administration pension funding changes (which you can read about here under Benefitsblog’s Pension Funding archives) are mere “accounting wizardry” or “hocus-pocus” while others say it is badly needed in this economy to preserve the defined benefit plan as a viable retirement program which companies will be willing to continue.