I got the same impression, that the board has suddenly acquired posters with a lot of inside knowledge and are pumping management and options.
I have no problem with the granting of options to all employee's of the company provided they are linked to future performance, that is future profits and not share price or anything else. They must also be long term.
As an example, 5 million shares could be given out for the benefit of employees provided it was spread out over say 5 to 7 years. The options could only be exercised provided clear profit targets were met by the company over the coming years. Profit would be defined as operating profit excluding income earned in prior periods and unearned income.
Thus if the target for 2004 was a profit of 30 million, and this was achieved then options at last years share price could be exercised. If profits far exceeded expectations due to excellent management then have a provision for the release of additional options at a discount on the vesting rate. Thus if the actual result was a profit as defined above was $45 million then the target would have been over achieved by 50%, so management and employees would deserve the additional bonus options. Naturally the profit targets would have to be set in conjunction with external directors and be approved by shareholders.
Currently managements view of options is that it repesents a cash cow for them to use as their own selfish bank account.
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