eBay wants to re-price ailing stock options

eBay has asked its shareholders whether it can change its employee stock options.

eBay has asked its shareholders whether it can change its employee stock options.

The decision mirrors one made by Google and could become common in the technology sector as share prices dip and stock options are worth less than they cost. eBay's share price has lost about two thirds of its value.

Google's share price has fallen almost 60% in the past 15 months, leaving most Google employees with share options that cost more than shares are worth.

About 17,000 employees are expected to benefit from Google's repricing exercise, which analysts estimate will cost Google more than $400m in charges.

Technology companies rely heavily on the creativity of their staff and are prepared to reprice stock options despite the fact that shareholders may suffer to boost morale.

eBay said, "Because of the continued challenging economic environment and the uncertain impact of our efforts to change our business, we believe these underwater stock options are no longer effective as incentives to motivate and retain our employees."

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