Contribution #6 - Chapter 12

After reading Chapter 12 in the book, I came across the Competing Through Sustainability article called “Google’s ‘One-to-One’ Exchange Could Prompt Others to Follow”. This article talks about Google Inc.’s exchange offer for employees with worthless stock options. This is a relatively generous offer and could prompt other companies to follow suit. This was interesting to see because Google Inc. does this to help employees whose compensation has suffered in the stock-market meltdown. The past few classes we have been talking about alternatives methods compensation rather than cost-of-living compensation or merit-based compensation. This is a very interesting method to combat employee’s compensation that is suffering, a method I would have never thought of. Many experts say that since Google Inc. is such a large company, that other companies may follow in the steps of Google Inc. and offer option exchanges. One expert said that it is an appropriate method and that generosity is in the eye of the beholder. He also said that the option exchange is better for other shareholders than Google issuing new shares, which would dilute other shareholders’ ownership stakes. This is a good alternative to help employee’s whose compensation is suffering.