Show Mercy to the Option Dreamers
I hear snickering in the land. The techno-geeks are getting their first taste of hard times. Too bad. Who is more deserving?
My bartender has been chortling about it for a month now. Then he read that some of the dot-busted crowd want a bail-out because they were caught behind in their taxes. That put him in such a snit that he forgot to charge me for my pint of ale, proving, I guess, how the technology fizzle is spiraling through the economy.
I confess to having a pang of the same feeling: revenge on the nerds.
But wait a minute.
Yes, the young technology blowhards got carried away with themselves. Those of us in Pleistocene-era industries are plenty tired of being mocked. But now that the high fliers are coming back to Earth with hard landings, do they deserve from us the same ridicule they dished out?
Perhaps a little. It’s always satisfying to see arrogance encounter humility.
But should we gloat?
Let’s not.
The fact is, the stock-option mania has become a mess. Plenty of the new economy pioneers made a paper killing on options, then they came up short. This month they were asked to pay taxes on gains that have already evaporated. A software engineer who got $100 in stock at an option price of $25 found himself liable for taxes on the $75 gain, although the stock may now be worth $10.
Some fear bankruptcy, although we might allow for some Chicken-Little hyperbole. But we do know that their wealth has been vastly reduced and may not cover their debts. We can assume that this has torn apart their dreams and stressed their families.
That’s nothing to gloat about.
I’m writing now about a certain type of technology worker. Most assuredly I am not offering sympathy to those entrepreneurs who sold off their holdings early, all the while publicly urging the rest of us to buy. If there is a way to even the score with them, count me in. And I think I can promise you my bartender’s proxy too.
No, I’m referring to the work-a-day software programmers, the technicians and thousands of others who threw themselves into the giddy technology boom. They held onto their optioned stock, believing they were holding onto the future. They’re the ones hurting now.
I know, I know: If they are so smart, why weren’t they smart enough to prepare to pay taxes in a downturn?
I’ll tell you why. Because they were busy. They were full of their own dreams. They were remaking the world. They worked into the night for the chance at options, and sent their dirty socks out to be laundered. Taxes were for accountants.
I look in the mirror. I didn’t get a big bang out of the stock-option frenzy. But I think of the many times in the last 20 years that various publishers of this newspaper altered the terms of my retirement compensation in complicated ways, offering me an employee stock ownership plan to thwart takeovers, then eliminating that in favor of something else, then offering me the chance to trade (I think) one kind of stock for another and so on.
Who has time for this? I have hardly any idea what awaits me if I live long enough to retire. Am I any smarter than those who didn’t devote themselves to the implications of stock options in the heat of a boom? My ride may be smoother in the end, but it’s not because I’m wiser.
Consider the alternative. Take your fully modern physician, for instance. Now here’s a person who is fully attentive to money and taxes at all times. Whether you enter a doctor’s office on foot or ride a gurney, if you are conscious you’ll be reaching for your wallet before you feel the soothing hand of medicine.
No thanks. Give me someone who puts their work first.
I harbor many doubts about the pace of technology. But I have no doubt that technology dreamers altered our era. They were haughty, yes. But they weren’t shysters or shirkers. They put it on the line. And they weren’t pikers either. They spread the wealth around. My industry benefited, and so did my bartender’s.
The least we can do for these people now is devise an elongated payback schedule for their tax bills so they can hold their lives and families together. We do this for students who take out loans, we do it for farmers. The lesson of stock options proved a hard one learned, and it can come with mercy as easy as not.
These workers are young and they’ll be back. So buy ‘em a pint. Maybe next time they won’t be so quick to look down on the rest of us, who gave them a hand when they needed one.
