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Week of October 29 — November 4

Stock Options Still Shine for Privately Held Firms

By David Beck

Venture-backed, privately held companies continue to offer stock options as a compensation tool despite press accounts of employees losing money when share prices dive.

“In the past 18 months or so, there has been a widespread assumption among some business writers that broad-based stock options had lost their appeal,” says the National Center for Employee Ownership.

But the Oakland, Calif.-based organization says this assumption isn’t supported by the data. In fact, its survey of consultants found that most private companies continue to view stock options favorably, with 77% of companies reporting that they give options to all their employees.

Although most employees who receive options work for large, nontechnical companies, closely held venture-backed firms at the forefront of technological innovations also use options to attract and retain creative, talented employees.

Computer-Security Managers Earn Top Pay

Executives who run corporate information-security systems can earn as much as $500,000 annually, according to a survey by the Broadmoor Group LLC, a global executive-search firm based in Dallas.

In addition, these high-tech professionals are bucking the trend of declining pay in the technology sector, especially in light of the recent terrorist attacks.

“While the economic slump has hurt many IT professionals, security experts are likely to see demand for their services increase dramatically,” says Randy Neal, the Broadmoor Group’s managing director.

Systems-security executives at Fortune 500 firms earn an average of $237,000 annually — with base pay of $161,000 and a bonus of $76,000.

In addition, the Broadmoor survey found that companies are increasing their budgets for systems security.

How to Handle Benefits During a Crisis

One of the many employment issues present in the aftermath of the World Trade Center attack was the apparent inability of some hard-hit companies to effectively communicate benefit allowances to grieving families.

In response, New York benefits-consulting firm Segal Co. issued a checklist to help provide guidance. It reminds employers that they need to move quickly to check with attorneys and insurance carriers if they want to bypass certain benefit-plan rules following a disaster.

The firm also emphasizes the importance of having trained benefits professionals who are capable of responding clearly and accurately to the wave of questions that are likely to come from family members.

Another key point mentioned by Segal Co.: “Under chaotic conditions, it may be harder than usual to identify the proper beneficiary.”

More Women With Infants Say “No” to Jobs

The percentage of mothers with infants who hold jobs has declined for the first time in 25 years, says the Census Bureau.

The agency speculates that the reason more mothers are staying home could be because they aren’t as dependent on the income as mothers were in previous years. This allows them to take longer maternity leaves.

This thought seems to be corroborated by data that show the drop-off occurred mostly among married white mothers who are at least 30 years old and have at least one year of college education.

For mothers who are under age 30, Hispanic or African-American and have a high-school education or less, no decline was reported.

Slow Economy Prompts Human Resources to Look Inward

As the economy continues to decline, senior human-resources executives are taking a hard look at their own departments.

Costs and the overall effectiveness of the HR effort are two areas that will get special scrutiny in HR audits. Other major HR functions that will be eyed: recruiting, benefits, salary and payroll administration, to name a few.

“The audit of the human-resources department is a four-step process: information gathering, evaluation, analysis and action planning,” says John H. McConnell, author of “Auditing Your Human Resources Department” (Amacom, 2000).