Starbucks, which wants to enact a “one-time stock option exchange” in light of its shares losing about three-quarters of their value over the last couple of years, decided to delete one sentence from its 2005 stock plan following “discussions with (shareholder advisor) RiskMetrics Group in connection with its review” of the shareholder approval it is seeking at the coffee retailer’s annual meeting next month.
You can read the offending sentence for yourself, but the gist is, shares of stock in option grants that were returned by exercisers to satisfy taxes used to go back into the stock option kitty, and thereby could be issued again.
After a meeting of the compensation committee of Starbuck’s board yesterday, that will no longer be the case.
Starbucks is seeking to exchange millions of underwater options with newly priced ones. The company had 84.5 million shares tied up in outstanding options as of Dec. 5 which had a weighted average exercise price of $17.48. Its shares closed today at $9.58.