Google Shareholders Lose That Loving Feeling

Reuters:

SAN FRANCISCO (Reuters) - Google Inc is famous for pampering its employees, but some shareholders feel like they're getting a raw deal.

The sore spot became evident after the Web search leader decided last month to reset the price of underwater employee stock options, in light of a more than 50 percent drop in Google's share price from its November 2007 peak of $747.24.

Read the whole story: Reuters

Comments

[drymartini1]

I have never hold GOOG stock before so never researched them and cant comment on their corporate governance.

what i can comment on is that the corporate governance in "tech" companies is way worse than industrial companies.

Tech companies have been diluting outside shareholder stake by issuing stock options to employees in the early part of this decade and latter part of last decade. Without accountability.

meaning, they would issue options, reprice options but would not show it as compensation expense in financial statements.

Here is a fact that a lot of people dont know about. Microsoft, which people LOVE TO HATE, was the first tech company to show responsible corporate governance in this regard.

MSFT was the 1st tech company to start expensing options in financial statements. when FASB wanted to make expensing stock options mandatory, companies like cisco, dell lobbied hard against it.

Industrial companies like ExxonMobil, MMM had started expensing options a long time before the tech companies were forced to !!

[Sigger]

The practice that management should receive stock compensation rewards, over and above their normal compensation and bonuses, based upon their efforts to improve stock price should be changed. As we have seen over the years, stock price is really independent and separate from company performance (all boats rising and falling with the tide). Exxon announces world record profits, as an example, and their stock price goes down. I'm not arguing that management never influences stock prices, because they do.

My point is that public companies should not be allowed to deduct the value of employee stock options from their tax returns. These options (which amount to billions of dollars a year) are treated as a tax deductions on the corporate tax returns, and the companies didn't spend any cash - how sweet. Another one of those tax deductions (and benefits) for the rich and famous, which is not generally available to average America.

[TurtleGuy]

Stock options are going to be moot soon enough. Very few companies are being founded these days with the intention of ever going public. Most startups are building their business around private funding, and giving employee incentives based on that. The stock market is far too volatile to plan your business around any more.

I say goodbye to Google and their gluttony, they are all smoke and mirrors anyway.

[mikekc]

The quotes by the Wall Street analysts questioning the value of giving perks and resetting the value of stock options to motivate rank and file non-executive employees points out the hypocrisy and corruption of the big business and finance sectors. These are the same people who defend giving out billions in bonuses and perks like private jets to Wall Street Executives who run their companies into the ground on the basis that if you don't constantly reward these people they will leave. Yet reset some options, provide a few thousand dollars a year worth of free food and coffee, or pay a little above the norm to the people who actually do the work and the same analysts start making veiled threats about not advising people to buy the stock any more.

If Wall Street had its way, all executives would be treated like kings, and anyone who doesn't work in sales or marketing would have their job exported to India, China, Mexico, or some similar place where labor can be arbitraged and exploited.

[MurrayAbraham]

I find it hilarious when "investors" believe their shares are an entitlement for guarantied eternal profit.

You don't like Google's policies? Sell your shares and move on. And next time read the terms and conditions a company offers BEFORE buying, not AFTER.

[kndam72]

I completley agree. I am tired of this "me-first" entitlement attitude. Just because you own shares in a company does not mean you own the company. Bunch of losers

[drymartini1]

Just because you own shares in a company does not mean you own the company

THATS EXACTLY what it means. Proportional ownership though. Meaning someone who owns a million shares owns a bigger chunk than someone who owns 10 shares.

shareholders are the real and only owners of a company.

Management isnt.
employees arent.

if you believe otherwise, need a quick trip back to school!!

[bluesman49]

Anyone who pays $400 to $700 a share for an internet company needs to have their head examined.

[JZ735]

I agree...BOO HOO to these losers...serves them right.