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Article: Restricted Stock: The Solution for Underwater Options?
- Article from:
- Mondaq Business Briefing
- Article date:
- October 23, 2003
- Author:
CopyrightCOPYRIGHT 2003 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Microsoft's recent announcement that it would begin to issue restricted stock to employees, instead of stock options, has provoked discussion as to whether more venture-backed technology-based companies should adopt the same approach. Over the last couple of years, stock options have not provided a significant incentive for employees of many of these companies, and accounting and regulatory issues, including issues associated with repricing options, have raised questions about the viability of a strictly options-based equity compensation strategy. Nevertheless, stock compensation continues to play a critical role in attracting talented employees to developing companies.
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