InformationWeek
Defining The Business Value Of Technology
May 4, 1998
Bowie Bonds For IT?By Edward Cone
hile money may not be the primary reason why IT workers shift jobs, people expect to be paid what the market will bear--and in the future, the market could become a more literal arbiter of worker value.
You've probably heard about the bonds issued against the future royalty payments of rocker David Bowie. The over-50 singer sold his entire $55 million issue of 10-year notes to Prudential Insurance Co. A first in the bond market, the sale brought Bowie ready cash, so he didn't have to wait for his royalty checks. Holders of the bonds will be paid interest of 7.9% for their risk.
Sounds outlandish, but some consultants say it could one day be common practice. Compensation on future value for IT employees has so far progressed no further than the more general mechanism of awarding stock options. But securitizing the individual could be a way to attract and keep corporate stars. "If intellectual capital is the most important resource in the economy, a whole tier of financial markets will have to come into being to address those needs," says Stan Davis, a research fellow with Ernst & Young's Center for Business Innovation and co-author of a new book,
Blur
(Addison-Wesley, 1998). "All it takes is one firm that believes in it and succeeds with it, and the floodgates are open."
Companies could be the market-makers for worker shares, most of which would be retained by the worker , Davis says. The worker's shares would rise based on their value to the organization. "I don't know that it's going to happen this way," says Davis. "I'm saying here's a plausible way to proceed."
Return to story, " Managing That Churning Sensation ."
Illustration by Joe Scanfani
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