Mercer

Perspective: Weathering the storm -- Revisiting underwater options

Unprecedented volatility has been wreaking havoc on equity programs, placing many, if not all, stock options underwater. As a result, many companies are weighing whether to take action on underwater options. This Perspective, the third in Mercer's "Weathering the Storm" series, provides a framework for evaluating underwater options and determining if actions are appropriate. The article explores different approaches to exchanging underwater options; discusses legal, shareholder approval and communication issues; and highlights findings from Mercer's review of about 50 recent option exchanges.  (Perspective, 7 Apr 2009, 8 pages)


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