Employees lose out in stock market tumble

Many of the casualties of the huge losses on Wall Street are employees of high tech companies, such as Intel, Hewlett Packard…

Many of the casualties of the huge losses on Wall Street are employees of high tech companies, such as Intel, Hewlett Packard and Apple. Many who are granted stock options in a highly competitive market share will be anxiously weighing up their prospects. While some companies' stocks now stands well below their 52-week highs, many are still far above the levels at which employees had been granted options.

In a period of intense competition for skilled employees, companies with declining stock prices are often tempted to re-price options to hold on to their staff. Both Netscape Communications and 3Com repriced options for employees (excluding executives) last January, during periods of financial difficulty. This is unlikely to happen while all share prices are depressed but some analysts suggest that such a move may yet be driven by the skills shortages.