Michael Dell Promises Employees That Big Changes Are Coming To The PC Business
Because the company is in ongoing negotiations with investors,
The company's founder and CEO has a lot of PR work to do with Dell employees, some of whom could get the short end of the stick if any of the proposed deals with
While options that are underwater—priced higher than the current stock price—aren't worth something today, they could be valuable in the future, if the stock price rises. But if Dell gains in value as a private concern, current options holders won't realize any upside.
Dell's other stock-based incentive plans will be gone, too, Gallagher reports.
But the company aims to give employees something new in return.
"Our intent is for all of our team members to feel that the new program is equal to or better than the prior programs," Dell wrote in the email.
Dell's board is considering three competing offers, two of which would take the company private. It's clear from this email, though, that Michael Dell is still pushing for the Silver Lake deal. Some thought he might switch to a competing offer backed by Blackstone. Dell's role is critical because he owns a large stake in the company and promises to contribute cash to a buyout, financing which would have to be replaced in a deal where he's not involved.At least Dell can promise employees more stable jobs. He said the company would hire more people in R&D and sales after it goes private and that the server team would reach No. 1 market share by 2014.
But he was vague about plans to fix the PC business other than saying Dell would invest in it. And the PC business is Dell's big problem.
And by PCs, we mean Microsoft Windows PCs.
Poor sales of Windows 8 is one reason Dell is struggling, Dell said last week in another SEC document. Among its long-term problems are:
"the deteriorating outlook for the PC market as a result of, among other things, smartphones and tablets cannibalizing PC sales, the uncertain adoption of the Windows 8 operating system and unexpected slowdowns in
But the Silver Lake deal doesn't get Dell out of Microsoft's yoke. If anything, it tightens it. Microsoft will be loaning Dell $2 billion as part that deal.