Cisco will offer Stock Options to Employees

Cisco Systems Inc., the leading manufacturer of networking infrastructure equipment that directs Internet traffic, has announced that it will grant its employees stock options for approximately 75 million shares of common stock. Cisco filed documents with the Securities and Exchange Commission on Thursday of the past week, with the options having an exercise price of $13.04 per share, which was the closing price of the stock on the Nasdaq Stock Exchange index on Thursday. Stock options are a popular method used by technology companies to keep long-term employees or to lure new ones to their company. Stock options have come under criticism recently, with critics claiming that they are not a valid method of currently valuing the stock, and that issuing options often inflates a company's earnings. In the past, Cisco has been a vocal opponent of granting stock options in the technology industry. Analysts see Cisco's announcement of granting stock options to all 35,000 of its full and part-time employees as a positive sign that Cisco is going to exceed the revenue numbers it posted previously. Cisco had initially forecast that its sales ending in April would either be flat or decrease from the previous quarter by 3%.

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