Broadcom Throws Workers a Repricing Rope

Tech companies basically invented the modern practice of stock options. It was seen as the only way to lure engineers away from the safety of their cushy careers at tech powerhouses like IBM and Hewlett-Packard. In addition to a salary, key employees also got a stake in the business as a reward for the risk of going with a start-up.

"What started as an investment reward has turned into a pay entitlement often rationalized as a way to attract and keep talent," says a New York hedge fund manager with no Broadcom position but who is short Siebel.

"Options are abused in the tech world," says the hedge fund manager. "And the sad part of it is that the Street looks through it because they are noncash items."

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