Esops: time to hedge?

With share prices depressed, now seems a good time for companies with large employee stock option plans to hedge them. Why aren’t corporate treasurers acting?

Equity derivatives dealers say this is a perfect time for companies to hedge their employee stock option plans (Esops). Companies with large, unhedged Esops face some unpalatable choices when employees exercise their options. The companies can purchase the needed shares in the market, which can be extremely expensive if the shares are performing well. They can hold Treasury shares in reserve, tying up capital. Or they can issue new shares, dilute their earnings and incur the wrath of