Tom Siebel Gives Back Some Love

Shares of software giant Siebel Systems(SEBL Quote) are up nearly 7% in Wednesday afternoon trading following the news that the company's founder and CEO, Thomas Siebel, has agreed to cancel all of the options he has been granted since 1998.

Siebel, who cut his pay to $1 a year two years ago, returned options covering 25.95 million shares, lowering his stake in the company to 10.7% from 13.5%. According to an 8K filed with the Securities and Exchange Commission, the fair value of the options was $56.1 million.

The once fast-growing company, which reports fourth-quarter results later today, was among the most generous companies, when it came to giving employees and executives stock options, during the 1990s. But it has struggled with dwindling sales for the past year and had to dismiss about 16% of its employees last year.

Late last year, the company also announced that it was exchanging some out-of-the-money employee options for cash and shares. Siebel ended up exchanging 28.1 million options at a total cost of $51.9 million, comprised of $20.4 million in cash and shares worth $31.5 million.