- Lucent Technologies plans to enhance employee perks by paying quarterly rather than yearly bonuses and granting additional stock options.
The changes took effect October 1 and the first payout will occur by May, officials say.
Bill Price, a spokesman for the telecommunications firm, says the revised payment scheme will also allow managers to reward employees based on individual performance instead of solely on the company's quarterly earnings. The change will affect all employees except union members, who are covered by terms established in a collective bargaining process, Price says.
Price declines to say how many additional stock options the company plans to issue. Earlier this year Lucent introduced a policy to allow employee stock options to vest over time, rather than all at once, says Price.
"We're trying to give more immediate rewards for [employees'] progress against our turnaround goals," he says.
Lucent's move comes just one week after the company announced that it was replacing chairman and CEO Richard McGinn, and that former chairman Henry Schacht would take over on an interim basis. As a result of recent earnings warnings, the company's stock has taken a nosedive in recent months, with share prices in the low 20s, well below Lucent's 52-week high of $US84 per share.
Company employee turnover hovers around 20%, which, according to Price, is consistent with the industry average.
Howard Rubin, a research fellow at Meta Group, says Lucent's new incentives will help it compete more effectively in the Internet economy.
"One year [at a traditional company] equals four Internet business years," Rubin says.
"Businesses that do not act quarterly would be equivalent to a traditional business that gave stock and bonuses once every four years."