Shareholders Approve eBay's Options Plan

Despite warnings about dilution, eBay (EBAY Quote) shareholders on Thursday approved a proposal to significantly increase its pool of stock options.

At the company's annual shareholder meeting in Orlando, Fla., investors approved the company's options proposal by a nearly 4-to-1 vote. Shareholders also approved the company's other proposals, including its choice of auditors and a stock plan for directors, and re-elected two board members who were up for election.

The vote represents the third time in three years that eBay shareholders have approved a large increase in the amount of options that the company can grant. Under the proposal passed on Thursday, the number of shares available under eBay's latest stock plan will increase by 50%, or 14 million shares. The increase in shares under the plan amounts to more than 4% of the company's outstanding stock.

eBay's options plan had drawn scrutiny from some investors and corporate governance critics because of the company's profligate use of options. Including the stock proposals passed on Thursday, the number of shares available under all of the company's stock plans is equal to more than 23% of outstanding shares. ...