BOISE — Micron Technology Inc. Chairman Steve Appleton and other top executives at the semiconductor chip manufacturer received at least 50 percent more stock options for fiscal year 2002, a period in which the company reported a record $907 million loss.
Appleton was given a 60 percent increase, or 400,000 options, according to Micron's annual proxy statement. Using federal guidelines, Micron said the value of Appleton's options over the next 10 years could be $13.5 million.
He continues to forgo his annual $800,000 salary at Idaho's largest private employer, a move he made a year ago and will continue until Micron posts a quarterly profit.
Compensation specialists said the boost in options is to ensure talented executives are not stolen away by rivals.
"If these are good executives, they are at risk because they've experienced a pay cut, and their previous options are underwater," said Daniel Moynihan with Compensation Resources in New Jersey.
In addition to Appleton, Micron's top executives operated under a 20 percent pay cut during the past year.
And, options granted last year had a strike price of $78.31, meaning they have no value unless share prices rise above that amount. Micron shares closed Thursday at $16, up 32 cents.
The latest options were given a strike price of $21.11, the price the stock traded the day the options were granted back on Aug. 22.
The financial rewards that can come with stock options can be extreme and can far surpass an executive's annual salary when the company is doing well.