Wave of Option Repricing Coming?

Employee stock options at 1 in 10 Fortune 500 companies are essentially worthless, and stock options are currently underwater at 40% such companies. That is up from a little over 30% being underwater at the end of Q1, according to a new study.

Some more specifics:

  • Five of the ten most underwater companies are in financial services
  • Freddie Mac has the most deeply underwater options, with 90% below its weighted average share price of August 15th. Fannie Mae and WaMu aren’t far behind.
  • VMware is already trying to get shareholder approval to reprice employee options.

Is a wave of option repricing looming? You have to imagine it’s up there as an issue, but a weak employment market is likely taking some of the pressure off job-hopping option-seekers.

[via FinancialWeek]

Related posts:

  1. Option Backdating: Tech is the Worst Offender
  2. Apple’s Option Imbroglio: What Jobs Didn’t Know, and When He Didn’t Know It
  3. Updated: Google’s Transferable Stock Option Program Begins
  4. Trading on Unusual Option Volume
  5. Options as the Immaculate Compensation