Tobriner described the various methods by which SAIC employees become owners, explaining that SAIC's stock program includes management discretionary tools, employee discretionary tools and salary-based tools along with an educational program. Tobriner described an innovative educational tool the company recently initiated to involve employees in the stock system early on. The point is that we want our people to learn about the stock system, how it works, and the principles of it. This a good way to teach them. Another method by which SAIC employees become owners is the management discretionary methods which include stock bonuses, stock options and direct purchases, all of which must be approved by management.
Stock options are an important acquisition tool for SAIC employees.
SAIC uses three approaches to NQOs. A second type is matching options, which are granted at a ratio of from one-half to four times direct employee purchases. A new category, negotiated options, has been effective in the last few years in rewarding specific performance goals. In addition to acquiring SAIC stock through options, employees can make direct purchases. For example, new employees are often given the opportunity to buy stock through what is called an initial offer.