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February 25, 2004
IBM Sets New Stock-Option Rules for Top Execs

IBM has new stock-option rules for its 300 top executives that will set the price at which the options can be bought and sold at 10 percent above the market price on the day they are granted, the Associated Press reports.

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The company says the plan would make it necessary for top executives to add value for shareholders before benefiting from stock options. The company says it's the first company with this type of performance-based approach to stock options.

"This is a way of saying the executive doesn't get any benefit unless he or she makes the company grow, makes the stock price grow," says John Bukovinsky, an IBM spokesperson.

The AP notes that stock options have come under increased scrutiny recently and some companies have moved away from them and toward granting stocks outright.

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