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Lower Option Strike Price for Ellis Execs

April 02, 1999|JESUS SANCHEZ, commercial real estate reporter

Los Angeles-based real estate services firm CB Richard Ellis issued its top executives new options with a lower exercise price in the wake of a sharp decline in the value of the company's shares, which have dropped about 60% from their 12-month high.

CB Richard Ellis re-priced the options on Dec. 15, when it lowered the price to $20 a share from as high as $38.50 for some executives. The executives had the number of the options they held reduced by 20%.

Option re-pricing plans have been criticized for sending a signal to managers that they will benefit even if their companies perform poorly. The practice has been common among technology companies.

Chief Executive Raymond Wirta and W. Brett White, head of North American operations, were among those who took the lower-priced options. The real estate brokerage and management firm said it lowered the exercise price to help it keep top employees. CB Richard Ellis shares fell 38 cents to close at $16.31 on the NYSE.

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