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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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A Retro '90's Event
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Posted by: Jack Ciesielski 5/23/2005 6:55 AM
CFO.com reports that Marsh & McLennan Companies has filed an amended proxy statement that asks shareholders to approve a repricing of options.

The plan would exchange way out-of-the-money options for fewer new ones, issued at current prices.

According to the CFO.com story, the filing states that "This would help us to retain key staff, motivate and reward employees for their contributions to our future success and reduce a substantial amount of stock option overhang."

It's one thing - and a good one, at that - to try reducing the option overhang. But must it be done by a repricing of existing options? The stockholders who were around when the options were originally issued don't get to reprice their stock.
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