French information technology conglomerate Groupe Bull SA plans to solve the problem of recruiting and retaining good programmers by offering them stock options in a newly-created software subsidiary, Evidian, it announced Tuesday.
Evidian, formerly the company's secure network management software unit Bullsoft, starts life with a turnover of $US60 million, 400 employees and three established product lines: AccessMaster, OpenMaster and OpenMaster for Telecom.
"We are being born today at 60-70 kilograms weight," said Evidian's President and chief executive officer Henry Ancona.
While Bull intends to remain the majority shareholder, Ancona hopes that the freedom to offer an equity stake in Evidian to staff and potential partners will help the business sustain the 20 percent to 30 percent annual growth rate it has seen over the last two years.
The new company is headquartered in Billerica, Massachusetts, where the job market is "highly competitive" and the granting of stock options to employees to encourage loyalty is commonplace, according to Ancona.
Now "the same practices are moving to France," where most of the company's 400 staff, including all the programmers and researchers, are based, he said.
Starting July 1, Evidian will offer its employees stock options. Ancona declined to give details of the scheme, but said it is competitive on a worldwide basis. Employees will be offered essentially the same deal wherever they work, with minor variations to take local regulations into account. "We are trying to build one worldwide team," he said.
Part of the allure of stock options is the promise that they will rise in value following an initial public offering, but Bull Chairman and Chief Executive Officer Guy de Panafieu declined to say when such an offer would be made.
"It's not our first priority, but it is a logical (step)," he said at a press conference Tuesday.
Another area in which Evidian can benefit from its reincarnation as a separate company, Ancona said, is in its search for partners to help it grow. Already it has more than 70 partnerships in the fields of software development, technology and systems integration. The ability to offer a minority share in the company would enable it to establish alliances with other integrators or software vendors, he said.