David Mandl on 28 Nov 2000 09:55:51 -0000

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[Nettime-bold] 'Just Pay Me in Cash, Please'

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.


---------- 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'


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.


Dave Mandl

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