Chambers lashes out at stock-option requirements
- 30 April, 2003 12:12
Requiring companies to expense employee stock options was likely to threaten a key form of compensation in high tech companies and send jobs out of the US, Cisco president and chief executive officer, John Chambers, said in a keynote address at the Networld+Interop (N+I) trade show in Las Vegas.
"If you take away employee ownership, and you have engineers in another area around the world work for one-tenth the cost with a better infrastructure and better supportive government, how many people in this room don't think that you're going to see an exodus of jobs from this country?" Chambers asked a full house at the Las Vegas Convention Center.
Chambers advocated some changes in stock-option practices.
He said all stock option plans should be voted on, senior management should hold their shares for long periods and companies should disclose the impact on share value and reveal what percentage of shares go to the rank and file. However, he attacked the idea of requiring companies to account fully for the cost of stock options in the period in which they were awarded.
"What it could result in is literally an engineering and high-tech job export act of 2003," Chambers said.
And where engineers went, companies would follow, because most executives of high-tech companies came out of the engineering ranks, he said.
"Before we jump off this cliff, let's understand and study the situation and not look back a decade from now and say, 'How did this country lose that leadership and all the jobs that are involved?'" Chambers said.
The comments came near the end of a speech in which Chambers covered a lot of familiar ground, enthusing over productivity gains that he said could come from companies using IP networks and aligning their business processes with the new technology.