November 2, 2009
A Proxy Solicitor’s Perspective: Option Exchange Programs
From our proxy solicitor podcast series, in this podcast, Reid Pearson of The Altman Group provides some insight into option exchange program issues, including:
– Once a company has decided to bring an option exchange program to shareholders, what are some of the first steps they should consider?
– From a proxy voting perspective, what types of issues will institutional investors and the proxy advisory firms (egs. RiskMetrics, Glass Lewis) be looking at when deciding on their vote or recommendation?
– Is it acceptable for an exchange program to recycle the exchanged shares back into the pool of shares available for future grant?
– What kind of fallout would there be if a company does an exchange of underwater stock options, but does not bring the program to shareholders?