Google Inc. continuing its innovative business policies has decided to offer its employees to sell their stock options online. The search engine giant has planned to create an online auction for its 9,000 employees. Clearly this move will definitely increase the options value to workers at the same time it will help raising the cost of options to the company. If Google succeeds in the plan it would mark the first time a U.S. company to create a private Internet auction specifically for stock options.
However, the recent move can also be dubbed strategic as these transferable options will give the company to get leverage to motivate and most significantly retaining the employees. On the other hand, experts are of the view that the idea is inventive and more companies will follow suit if Google succeeds.
The private online auction will be handled by Morgan Stanley and it would be restricted only to Google employees and the participating investment banks. The company however said that the plan has been designed to help employees to know the value of their stock options, which would naturally be higher than the share price at Wall Street. Further, employees options amounts roughly to two percent of Google’s outstanding share and it has been kept on a completely diluted basis.
Moreover, the Google’s stock option has always been hot favorite as its prices rose sharply since it went public two years back in 2004. The initial offering of Google share was at $85, which has now risen to hover around $500 and to be precise at $481.78. Therefore, new employees of the company will not be able to reap the same benefit for this policy in comparison for those people who had been hired earlier. However, its core rival Microsoft Corp. was the first company to experiment with offering the transferable options to its employees.
