<nettime> 'Just Pay Me in Cash, Please'

[David Mandl <dmandl@panix.com>]

Interesting article from today's WSJ: Apparently stock options have gone
out of style at dot-coms; employees (especially high-level execs) are
demanding actual money.  For example, Amazon just paid bonuses of a
million bucks cash to each of two execs.  Amazon?  Cash?

Besides the interesting sociological/anthropological implications, this
will raise new financial problems: As if they're not having enough trouble
already, the dot-coms will now have millions in new expenses paying
employees who they were in effect not paying before.

Funny side-note: In the heat of dot-com frenzy, when theStreet.com and its
editor were on the front pages every day ("A _journalist_ worth $9M?  A
_journalist_?"), I remember one article mentioned that TSC had made
celebrity author Michael Lewis an offer to join their staff early on for a
massive quantity of options.  He said "No thanks, I want cash.  No deal."  
When interviewed for the article two years later, he made some feeble
attempt to stand by his decision, but he probably was kicking himself, and
the verdict was very clear: LOSER!  As it turns out, he'd probably be in
much worse shape today if he'd accepted the offer.  Amazing.

   --Dave.


---------- Forwarded message ----------
               [The Wall Street Journal Interactive Edition]
                             November 28, 2000

Heard on the Street

The New Dot-Com Mantra:
'Just Pay Me in Cash, Please'

By SUSAN PULLIAM
Staff Reporter of THE WALL STREET JOURNAL

Stock options were once all the rage among dot-com employees. These days,
cash is making a comeback.

It turns out that some Internet employees aren't quite the risk-takers
many thought they were: With the collapse of many Internet stocks, both
executives and rank-and-file are pressuring more and more Internet
companies to increase the amount of compensation they pay out in cash
rather than stock options, many of which have become worthless as the
shares have plummeted.

The shift is most noticeable among Internet bigwigs, some of whom have
landed hefty cash payments lately. In recent months, Amazon.com paid cash
bonuses of $1 million each to Warren Jenson, chief financial officer, and
Jeff Wilke, vice president of operations, "in recognition and
appreciation" of their contributions, according to a letter included in a
recent quarterly filing from Jeff Bezos, chairman of the Internet
retailer. The cash payments are on top of compensation packages that
continue to include stock options.

Not long after, Joseph Galli, former president and chief operating officer
at Amazon, left to become chief executive of VerticalNet. For its part,
VerticalNet, an Internet business-to-business company, paid a $4 million
cash signing bonus to Mr. Galli when he came on board. While his pay
package continues to include stock options, such a bonus payment in the
past would have been made in stock, according to Wall Street analysts.

"Two years ago [VerticalNet] would have given him a huge amount of stock
options and he would have said, 'Thank you,' " says Henry Blodget, a
Merrill Lynch Internet analyst.

[snip]

--
Dave Mandl
dmandl@panix.com
davem@wfmu.org
http://www.wfmu.org/~davem




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