How the bubble burst for tech staff

By DAILY MAIL REPORTER
Updated:

 

A YEAR ago they thought they were rich - and many were spending in anticipation, holidaying in the Maldives or moving to a bigger home near the tennis club.

Since then staff at Britain's hi-tech companies have lost hundreds of millions of pounds, as plunging share prices left many options packages nearly worthless.

At software company Autonomy, staff incentives once worth £250m are worth £17m now. The average scheme member has seen his paper wealth shrink from £1.8m to £120,000. By contrast, chief executive Mike Lynch's shares, though down nearly 80%, are still worth £200m.

Computer games developers at Eidos have seen £57m paper profits shrink to £3m. Staff at Thus, the former Scottish Telecom, have seen last year's £24m dwindle to £1m. Their counterparts at Hull's Kingston Communications have seen £48m become £370,000.

Longer-serving staff at Bookham, Swindon's answer to Cisco Systems, thought they were worth £581m last summer, soon after the group floated. Now the figure is £29m. Founder Andrew Rickman's shares are still worth £100m.

This is the tip of the iceberg. Many companies will soon disclose packages handed out last year. Newer staff, and more junior personnel brought within schemes in the past two years, are suffering the most.

Their options were priced to reflect soaring share levels of 1999 and 2000. Hand-held computers group Psion admits: 'The granting of options became broader within the company in the last year or so.' Its shares, at 130p, are a fraction of last year's peak near 1500p. More senior staff, granted options three or more years ago, are still in the money.

Logica, the FTSE 100 computer services giant, has fared better than most, because options were granted over more than a decade. They are still worth £133m - but even this is £200m off the peak.

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