High-tech CEO's share holdings drop 36% in value - 24 July 2009

High-tech CEO's share holdings drop 36% in value

A recent study found that CEOs from the top 100 high-tech firms -
several of them based in Silicon Valley - took a painful hit to their
finances and lost in average $38.2 million from their total equity
holdings as a result of the ups and downs in their companies' stock
value in the last 12 months.

The average drop from $105.2 million to $67 million in the value of
their individual holdings between June 30, 2008 and 2009 represents net
losses of over 36 percent, according to a study by Steven Hall &
Partners, an executive compensation firm.

"CEOs as a group lost a total of $3.8 billion in net equity value,
driven by the net 23 percent average stock price decline," a press
release said.

The study points out that a critical consequence of this blow to
executives' pockets is the loss in incentive value of the companies'
equity plans.

Companies often use these plans, which compensate top executives
with stocks and stock options, to attract and retain top talent. By
tying top-level employees' finances to the market value of the stocks,
companies hope to ensure that executives will perform at their best.

"Such value erosion has left these companies without a 'carrot or
hook' to hold onto or motivate their top executives," the release said.

But even though the drop in stock prices makes it more tempting for executives to look at

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