High Tech Energy Crisis

According to the San Jose Mercury News, a recent survey by Deloitte & Touche demonstrates that increased scrutiny of option issuance has resulted in a notable decrease in option use by tech companies. 73% of the public companies surveyed said that they have reduced or will reduce the number of options they issue in the coming 12 months. And two thirds anticipate overhauling their compensation plans if the accounting rules require the expensing of options. To my mind, those are devastating numbers. Stock options are the fuel upon which tech companies are propelled. They give everyone in a company the incentive to strive to make the most of that company. If those incentives are dismantled, I fear that startups will no longer achieve the same velocity that has historically been the case in the United States. And that is not an economic advantage this country can afford to lose.

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