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The stock options of Telef�nica
Everyone still clearly remembers when 100 Telef�nica executives collected over� 40,000 million pesetas as a company loyalty bonus. Given the size of the figure, the government toughened the fiscal treatment of stock options.

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In the boom years of the Internet, when the dotcoms were growing like mushrooms, the executives of cyber-companies topped up their pay-cheques with stock options, with the dream of becoming millionaires when the companies share value shot up as expected. This retribution system not only brought lucrative benefits to its members, it was also used as a means of attracting the sector's leading talents.

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But in the end the bubble burst, leaving the stock options all washed up and the company directors of thousands of bankrupted dotcoms heading for the dole queue.

Today's stock options
Since the dramatic rise and fall of stock options things have changed considerably and the European Union has now decided to save what was a very useful tool for companies. In July the EU proposed to the member states that workers should be allowed to take part in their company's profit sharing scheme, the aim being better productivity. The EU believes workers are far more efficient in their particular tasks when given a retribution scheme related to the win-win strategy. In other words, what's good for the company is good for me.

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According to the directive approved by the EU on 10 July, the member states are asked to encourage the financial involvement of employees through such profit-related schemes as stock options. We need a new type of company and financial participation systems such as shares, stock options or profit-sharing schemes are part and parcel of that new model. Financial participation should no tbe confined to the executive boardroom, but open to all, stated the EU's Employment and Social Affairs Commissioner, Anna Diamantopoulou.

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In the near future, Brussels intends to pick out the best financial participation schemes and set them up as examples for all countries to follow. At the same time the EU will set up a group of experts to look for ways to cut through the red tape that prevents the introduction of profit-sharing schemes at a European level for companies present in several countries throughout the EU.

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Currently, only 31% of European companies award workers with shares, a figure that falls to 19% in Spain. The countries with the highest figures are Holland and the UK, where 45% of companies award shares. As for profit-sharing schemes, some 45% of EU-based companies possess them. In Spain that figure drops to 25%, whereas in France, some 87% of companies have some sort of profit share.

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Stock options can be an effective way for companies to give employees, middle management and directors the incentive to reach targets. For them to be effective, stock options must follow the agreed regulations: an eighth part of their value can be cashed in during the first year, another eighth in the following six months and another eighth in the next six months, and so on until four years have passed, when the whole package must be cashed in.