ANITE TO ROCKET ON RESULTS

As you say - from having a look at Save As You Earn options the excise price can be set at -20% below the market price when granted to the employee.
The company wants its own employees to become shareholders, and thus the employees will be tuned to the interests of the shareholders. The employees will thus work harder and increase profits. It is the resulting large increase in the profits which pay for the scheme from all the extra work the employees put in.

Well, this all sounds great.

But let's see what this means to a investor. Employees excise their options. You have a large dilution in the shares which kicks in.
Money goes from the existing Shareholders to the employees. They pay for the difference between the excise price value and the current share value.

So the existing shareholders and not profits pay for the employees gains.

But the employees have now been incentivised to increase profits. This is totally unproven to happen, but even if they did increase growth,
It is now much harder for any increase in profits to match the effects of the dilution of the shares. The more options excised, the more earnings/dividends per share drops.

In this case, the companies issued share capital is 305m shares with a guideline of 10% of this to be offered as a maximum under the SAYE scheme. Thats 30.5m shares total. They have blown this however, and have now voted to inflate the issued capital to 350m shares to keep the options flowing. The shareholder funds (financial report as of April 2001) are only £149m!!

As for the arguement that institutions own 60% of it... They also owned the likes of BT, Marconi etc...

Look - Wake up - The renumeration of the directors is in the millions of options, hastly excised and sold - and thats for this year alone!!!!
All of this money come from existing shareholders!!