“There is a lot of momentum building” to reprice stock options, said Alexander Cwirko-Godycki, a research manager for executive compensation specialist Equilar. “Everyone has just been sort of waiting for a big name to do it.”

Google already has been joined by coffee chain Starbucks Corp., which unveiled a proposal to allow its employees to swap their existing stock options for new ones that will be more likely to put cash in their pockets.

But Googles repricing program made a bigger splash because its far more generous to the employees – much to the dismay of the shareholders who have seen their holdings in the Internet search leader plunge by 57 percent, or a collective $130 billion, since the stock peaked at $747 per share in 2007.

Google shares surged $18.20, or nearly 6 percent, to close Friday at $324.70 as investors cheered the companys fourth-quarter earnings report. But analysts said the rally probably would have been even more robust if not for the decision to reprice the stock options.

“A lot of people just hate it,” said Broadpoint AmTech analyst Rob Sanderson. “I had one money manager tell me, The next time you talk to Googles management, tell them I want all the stock I bought at $400 a few months ago to be repriced at $285.”

Understanding the angst triggered by option repricing requires an explanation on how the perquisites work.

Employees at thousands of companies generally receive a bundle of stock options when they are hired, and frequently receive additional grants in subsequent years.

The options are assigned what is known as an “exercise price” – the employees cost for cashing in the reward. This price typically equals the stocks price at the time of the grant.

The more a companys stock price rises above the option price, the higher the profit for employees. The idea is to inspire workers to put in longer hours and come up with better ideas – to increase the companys value and the employees potential windfall.

But if a stock price plunges below the option price – a phenomenon known as being “underwater” – employees can become dejected, distracted and perhaps even tempted to entertain other job offers, especially if a large portion of the compensation comes in the form of options.

The problem of underwater options faces 72 percent of the companies in the Fortune 500, based on Equilars analysis of average exercise prices in mid-December.

Those are the options likely to be exchanged in a program running from Jan. 29 through March 3. The new options are expected to have an exercise price tied to the market value of Googles stock in early March.

Even though the repricing will result in $460 million in accounting charges, Google reasoned the cost is acceptable, to avoid morale and retention problems among its 20,222 workers. Since its inception in 1998, Google has given options to virtually all of its employees, turning thousands of them into multimillionaires.

“We think its a good deal for shareholders and for our employees as well,” Google Chief Executive Eric Schmidt said Thursday.

Even though it has been cutting back on some perks, Google is still renowned for pampering employees – a trait that isnt widely shared. Thats why Sanderson isnt convinced Googles repricing will cause other companies to follow suit.

“Google gives away free lunches to employees, but that didnt compel everyone else to do it,” he said.

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