Baby steps…
Though it may be hard for investors in Safeguard Scientifics (SFE) to get excited about much, given the stock’s performance over the past 5 years, there was an interesting tidbit in an 8-K the company filed earlier this week.
That’s because the company added an interesting vesting schedule to the cache of options handed out to newly promoted executive John Loftus. Loftus, who was promoted to evp and managing director for information technology, will get 1.5 million options at $1.55 a share. But the options only vest as Safeguard’s market capitalization improves. If it goes up by $100 million, the first 10% vests; another $150 million gives Loftus another 20% and so on.
By tying the options grants to some form of improvement, Safeguard seems to be saying they’ve learned some of the lessons of the past few years when options were handed out like candy and executives cashed in while ordinary investors got burned. One can only hope anyway.
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September 23rd, 2005 at 11:59 am
I haven’t looked at the 8K but I’m wondering if this gives management incentive to do meaningless acquisitions. That will certainly improve market cap. I wonder if there’s a way to do it that requires the market cap growth to be organic or at least stipulate that acqisitions don’t count.