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  • March 2002 (Revised October 2002)
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Akamai's Underwater Options (A)

By: Brian J. Hall, Houston Lane and Jonathan Lim
  • Format:Print
  • | Pages:28
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Abstract

Akamai's stock price declines dramatically with the NASDAQ in 2000, causing virtually all employee options to go underwater. Ownership and retention incentives are largely destroyed, and employee morale falls sharply. Management weighs the pros and cons of various alternative "solutions" to this problem (including repricing, issuing a new supplemental grant, canceling the underwater options and issuing a delayed regrant, and making a tender offer to exchange underwater options for fewer shares of restricted stock).

Keywords

Motivation and Incentives; Stock Options; Attitudes; Compensation and Benefits

Citation

Hall, Brian J., Houston Lane, and Jonathan Lim. "Akamai's Underwater Options (A)." Harvard Business School Case 902-069, March 2002. (Revised October 2002.)
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About The Author

Brian J. Hall

Negotiation, Organizations & Markets
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Related Work

    • March 2002
    • Faculty Research

    Akamai's Underwater Options (B): The Decision

    By: Brian J. Hall, Houston Lane and Jonathan Lim
    • March 2002
    • Faculty Research

    Akamai's Underwater Options (A) and (B) TN

    By: Brian J. Hall and Jonathan Lim
Related Work
  • Akamai's Underwater Options (B): The Decision By: Brian J. Hall, Houston Lane and Jonathan Lim
  • Akamai's Underwater Options (A) and (B) TN By: Brian J. Hall and Jonathan Lim
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