This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

A Big Thumbs Up for eBay's Options Plan

eBay's (EBAY - Get Report) proposal to give managers significantly more stock options got an unexpected vote of confidence Wednesday from the the nation's leading proxy adviser.

Institutional Shareholder Services recommended that shareholders vote for eBay's options plan this year, despite saying last year that investors should vote down similar increases in the number of shares eBay can grant as options.

The proposal comes as stock options are under scrutiny by investors, accounting experts and public-policy makers. Because stock options tend to reward employees and managers for short-term stock fluctuations, options have been linked to corporate scandals at Enron and WorldCom, where questionable or illegal steps allegedly were taken to boost share prices.

Yet eBay shows no signs of letting up on its options binge, despite the scrutiny.

The company's board is asking shareholders to approve a greater-than-50% increase in the number of shares the company can award under its current stock-option plan for employees and managers. The proposed increase, some 14 million shares, is tantamount to about 4% of the company's outstanding shares. Shareholders approved similarly sizable increases in each of the last two years. They'll have a chance to vote on this proposal at the company's annual meeting in Orlando on June 26.

Company representatives didn't return calls seeking comment about the proxy vote or the ISS recommendation.

ISS is basically the only game in town when it comes to proxy recommendations for institutional investors, and its recommendation may well carry weight with investors. So what's behind the change of heart at ISS? This year's run-up in eBay shares means the cost of the options comes in below a cap set by ISS according to a proprietary formula it uses. Also, eBay has promised to seek shareholder approval before repricing the options.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
EBAY $57.98 0.61%
AAPL $125.83 2.10%
FB $83.18 -0.14%
GOOG $551.63 0.60%
TSLA $190.17 2.80%


DOW 17,994.46 +281.80 1.59%
S&P 500 2,087.54 +26.52 1.29%
NASDAQ 4,945.7690 +54.55 1.12%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs