Subject:
executive stock options An employee stock option is a call option on the common stock of a company, issued as a form of non-cash compensation. Restrictions on the option (such as vesting and limited transferability) attempt to align the holder’s interest with those of the business’ shareholders. If the company’s stock rises, holders of options generally experience a direct financial benefit. This gives employees an incentive to behave in ways that will boost the company’s stock price.
Employee stock options are mostly offered to management as part of their executive compensation package. They may also be offered to non-executive level staff, especially by businesses that are not yet profitable, insofar as they may have few other means of compensation. Alternatively, employee-type stock options can be offered to non-employees: suppliers, consultants, lawyers and promoters for services rendered. Employee stock options are similar to warrants, which are call options issued by a company with respect to its own stock. (Wikipedia Jan 2010)
Calling the top
By John Schroy, on September 17th, 2007 | 
It is always somewhat foolish to attempt to call the top of a bull market or the precise moment when a speculative bubble pops, but sometimes its better to be foolish than sorry.
During the ides of July 2007, when the Dow Jones Industrial Average was gently massaging 14,000, signs appeared that air was finally beginning to leak out of the Great Buyback Bubble that has long characterized the US equity market.
The headlines were about a liquidity crunch, sub-prime lending, and banking risk, but the buyback band kept on playing, as if these events were in some parallel universe.
US Equities
By John Schroy, on February 10th, 2007 | 
Depending upon your point of view, the US stock market is either vastly over-priced, or a great bargain — and if you have a split personality, you could both be right!
This peculiar state of affairs occurs because two radically different yardsticks can be applied in measuring corporate performance: one based on an unquestioning respect for Generally Accepted Accounting Principles, and the other based on commonsense, an appreciation for cash in hand, and the time-honored principle of, ‘What’s in it for me?’.
Stock buybacks
By John Schroy, on November 3rd, 2006 | 
Trial lawyers are showing interest in the apparent conflict of interest when insiders use stockholders’ money to buy back shares on the theory that they are undervalued, and at the same time are unloading their own shares.
Legal action in this direction could threaten the equity market, given the importance of stock buybacks in keeping prices up.
If stock buybacks were to cease, for any reason, the market could crash, which might wake the SEC from its slumbers.
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