Current Account takes a pretty po-faced attitude to share options. Share options should be a method of rewarding senior executives for a company's good share price performance and a way for those executives to build up a sizeable stake in the company without running up heavy debts.
After all, a director who has a sizeable stake in a company has a common interest with the ordinary shareholder and demonstrates confidence in the future of the company. Or, at least that's the theory.
Or are share options a way for senior executives to make a quick profit by periodically exercising their options and then selling the shares at a fat cash profit?
This week, Grafton managing director Norman Kilroy made his third killing on share options within the space of 18 months. In that period, he has made a profit of €1.59 million (£1.25 million) on his options. Mr Kilroy - who owns fewer than 50,000 Grafton shares - is also on a remuneration package from Grafton worth €357,000.
Current Account does not expect company directors to build big borrowings to exercise their share options. But surely directors exercising options could simply sell enough of them back into the market to cover the cost of exercising the options in the first place? By that simple mechanism, they are able to increase their holding at no extra cost.
Simply exercising share options and then flogging the lot into the market sends the wrong signal and suggests that the usually very well-paid people concerned see a better home for their money elsewhere than in the shares of the company for which they work.
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