The poor second quarter was exaggerated by some big telecoms deals from the year before and Mr Lane has stepped back from the disruptive reorganisation of sales, remotivating the team by lowering quotas and repricing options (see article).
Matt Ward, an expert on pay and chief executive of WestWard, has suggested a set of rules that could make repricing more palatable for ordinary investors.
The banks' hope is that they can compensate by increasing their unleveraged returns, which means grabbing higher volumes of business and repricing their products.They do have some cause for optimism.
Repricing stock options is common when a company's shares fall sharply, particularly in the volatile high-tech industry.
And from an investor's perspective, repricing can appear perverse.
In June, as its share price slid, it proposed repricing share options.
But America's national accounting regulator now wants repricing to appear in companies' accounts as an expense, like wages, making repricing much less attractive.Yet, in other ways, there will be relief when Internet shares come back down to earth.
The most important, he says, is to exclude top managers from repricing, because they can influence the share price directly and should not be cushioned if it drops.So far, however, high-tech companies do not seem to be listening.
Employees at a huge number of big old firms, and a few unfortunate new ones, have large numbers of share options under water ie, their exercise price is above the market price.A traditional remedy for under-water options—repricing them downwards—has become visibly more costly, thanks to new accounting rules to charge the cost of granting options against profits.
I remember a banker saying to me, exactly over Christmas 2007, that all that was happening was "a fancy way of repricing credit".
