Google reprices employee options

Google is allowing employees to swap underwater stock options for new ones price at the $308.57 closing price Friday.

The company detailed the move in a regulatory filing with the Securities and Exchange Commission. Google said it is allowing employees to swap options granted under its 2004 stock plan prior to Feb. 3, 2009 to get new ones based on Friday's close.

As reported by MediaPost, Google's move has raised a few hackles. These hackles are common and were an every day occurrence during the dot-com bust. Here's how the argument breaks down:

• Google says options are needed to retain and recruit employees;
• Shareholders say they can't get their underwater common shares repriced;
• Companies usually say screw shareholders since we need our employees;
• Pundits yap about rewarding failure (guilty as charged).

My take: I'm willing to cut Google a little slack here. Why? It has performed well fundamentally. I start ranting when a company tanks for very good reasons--mismanagement and poor planning--and then reprices options. Google doesn't exactly fit that mold.