Siebel CEO Cancels Options Grants --- Move, Going Back to 1998, Follows Criticism in Media Of Executive's Big Awards
Siebel Systems Inc. Chairman and Chief Executive Thomas Siebel, who has been criticized for his large stock-option awards, voluntarily has canceled all the stock options he has received since 1998.</br></br>Separately, the company reported a fourth-quarter net loss of $38 million, or eight cents a share, including a $95.9 million restructuring charge. That compares with net income of $65.9 million, or 13 cents a share, a year earlier. Revenue fell 19% to $394.7 million, from $487.8 million a year earlier, while revenue from licensing software plunged 37% to $157.4 million.</br></br>Mr. Siebel, who lowered his salary to $1 for each of the past two years as his software company stumbled, returned options covering 25.95 million Siebel shares. He hadn't exercised any of the options, some of which were out of the money, but the company had issued underlying shares to cover any eventual exercise by Mr. Siebel. The move lowers his stake in the nine-year-old company he founded to 10.7% from 13.5%.</br></br>The move is the latest in a series of steps the San Mateo, Calif., company has taken to restructure its compensation and options programs. In September, Siebel Systems allowed employees to swap about 28 million out-of-the-money stock options for cash or restricted stock. The move also comes after a Louisiana teachers' pension fund sued the company last year, alleging the board had improperly awarded nearly $1 billion worth of options to Mr. Siebel over the years. Siebel Systems has said the suit is unfounded.</br></br>Mr. Siebel, who has been under scrutiny for his large options grants, was upset at being included in critical news coverage about executive compensation, according to a person familiar with the situation. Company spokesman Patrick Dillon said, "He is making a rather large and sweeping statement by canceling options that go back to 1998. If anything, this is a pretty big reality check not only for this company, but for CEOs in general."