Broadcom Throws Workers a Repricing Rope

Broadcom (BRCM Quote) continues to put shareholders first. At least those who happen to work there.

The Irvine, Calif., communications-chip maker set plans Monday to let employees swap millions of out-of-the-money options for a smaller number of market-priced ones. With the decision, which will saddle the company with a $238 million charge, Broadcom joins a growing number of once-hot tech firms using various strategies to keep stock compensation alive in an era of plunging share prices.

But to listen to some people, the tech industry practice of issuing and sometimes repricing options en masse is troubling because it dilutes shareholders even if it does help to retain talent in an absurdly soft job market. Meanwhile, critics charge, managers keep selling, the stock keeps stumbling and outside investors are left holding the bag.

"This is really a case of Broadcom management saying heads I win, tails you lose," says TransAmerica Investments money manager Chris Bonavico, who has no Broadcom position. "They got to cash out on the way up and they don't have to share any of the pain on the way down." ...