Gerald Weiss, Spanish Version Case Solution
He was provideda 10-year options bundle with unlimited upside and a guaranteed floor of $12 million. If the stock price dropped significantly, Gerald would be given more choices (at-the-money) to bring the whole Black Scholes value of his bundle back up to $12 million. Because of the culture of informality of the company's, the deal was agreed to with a handshake from the CEO, observed the VP of human resources and by the present CFO, but not written down. Gerald askedto revalue his options bundle, and when the stock price actually dropped, the company reneged on the deal. Teaching Aim: To create dialogue about the advantages and pitfalls of mega-option grants, the problem of revaluing choices, and the battle between protecting the financial interests of the worker and sticking to business culture.
This is just an excerpt. This case is about ORGANIZATIONAL DEVELOPMENT
PUBLICATION DATE: April 19, 1999
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