In an effort to strengthen employees' identification with shareholders' interests, Dime Bancorp announced a stock option program for all 3,200 below the top executive level.
Under Dime's "pride shares" program, all full-time employees except the top 12 executives will be granted 500 options to buy Dime stock. Part-time employees will be given 250 options.
Last year, Chase Manhattan Corp. and BankAmerica Corp. announced broad- based stock option plans. And BankAmerica said Monday that it would expand its program-which, with 85,000 eligible participants, is already considered the most sweeping in the banking industry-to include 3,500 employees from 24 foreign countries.
Regional banking companies like Barnett Banks Inc., Jacksonville, Fla., and Central Fidelity Banks Inc., Richmond, Va., have also introduced programs this year.
Many consultants said the plans can be a good motivator for rank-and- file employees, giving them the chance for an equity stake in their bank. Such programs have long been popular in entrepreneurial companies, like those in Silicon Valley, said consultants.
"They remove the stigma of being a wage slave," said Charles King, a senior consultant who specializes in compensation issues at William M. Mercer Inc., San Francisco.
Options can also be used to lure key talent, particularly in technical fields, said Mr. King. "Technology experts are essential to modern banking," he said, "so banks have to find some way to attract and retain these employees."
Dime stock options will be granted in stages for three years. On May 15, Dime's full-time employees were awarded 150 options; part-timers got 75.
Once the price of a share of Dime common stock reaches or exceeds $20 for five consecutive trading days, participants in the program have the right to buy the shares for $17.125 each. The stock was trading at $16.75 Tuesday afternoon. Dime employees can also exercise the options after five years regardless of the stock price.