Share options are very much a long-term bet which is why they are dubbed golden handcuffs

Share options are very much a long-term bet, which is why they are dubbed "golden handcuffs".Holway's comments are borne out by Computacenter, which floated on the London Stock Exchange in May 1998. It nestles in the FTSE top 200 - making it an OK bet as far as shares go - but in the last 12 months it has veered between 377p and 650p. The Internet biggie Freeserve is another; its shares peaked at pounds 2.40, but last week were at pounds 1.50.Computacenter's company secretary, Alan Pottinger, believes offering share options to executive staff ensures that the firm keeps its skilled and most talented individuals."We offer share options, as they encourage entrepreneurial skills.Computacenter's ethos is based on making sure that IT firms that grow from an entrepreneurial background don't lose their original dynamism Share options are one way of feeding that original hunger. If you end up having to buy your shares in the wrong year, then you are stuffed."But be employed by the right firm, and you are on to a winner, believes Richard Holway, chief analyst and managing director of Richard Holway Associates "Look at the grandaddy of them all, Microsoft. By far the largest single form of remuneration there has been through share options." He believes that the employee simply cannot lose."Some share option schemes involve the employee's putting aside a set amount of money a month, but when firms want to woo in top execs they offer share options on top."Holway adds: "Many people in computer firms have made an absolute fortune." However, share price fluctuation must be built into people's expectations, he stresses. Now, if the value of those shares goes down when it comes to his having to buy them in the next five years, even by a penny, he's taken the pay cut for nothing."At present such schemes look appealing.

New media companies have been doing so well - everyone thinks they're on to a winner. But you only have to look at the Nasdaq index - Amazon shares have fluctuated from from $60 to $200 each. He says: "I am not sure that many people will really understand what share options are about. One of my colleagues on pounds 50,000 was offered a pounds 40,000 salary with pounds 30,000 of share options. Share options are familiar to many employees in the form of Save As You Earn (SAYE), a savings scheme whereby employees put aside their own money each month to buy reduced-price shares at a fixed future date if they so decide.The employee is then left with an option to buy, or can take the money plus interest if the share price is no longer an attractive bet.However, the share options being offered to IT executives often lock in employees because they are offered as part of a remuneration package, rather than an optional extra.The danger, claims another senior industry figure - who also does not want to be named - is that employees are being duped into leaving a high- salary job for a mediocre one. Signs that the stock market's love-affair with such firms may be waning has focused attention on the pitfalls of using share options or profit- sharing packages to lure staff. Instead of paying up-front for the skills needed to fuel the new media explosion, start-ups, inspired by the flotation of, among others, FreeServe and Computacenter, have been using shares, or the promise of a profit share, to woo Web programmers and developers away from high salaries. Marese Conaty, a director of new media at the IT recruitment specialist Price Jamieson, claims that demand for the programming skills needed, eg in HTML and Javascript, is outstripping supply.One industry source said that fledgeling firms needed to come up with ways of rewarding employees who risk high salaries to join the industry.

HIGHLY SKILLED IT professionals are being warned against underselling themselves in their enthusiasm to be part of the new media explosion. But its equipment can be purchased there."It's already Europe's fastest-growing chat community. The British site is now up and running, with many mad events going on in the next few weeks. You need only log on to the Dobedo website to get the hottest ticket in town www.dobedo. co.uk. He points out that there are advertising banners in real cities, which justifies the inclusion of neon lights and billboards in the Dobedo island. He describes these parts of the site as "shop-u-entertainment".

"It's the borderline between shopping and entertainment; you walk down the avenue of Trumpford and there is bound to be a Dixons, for instance, although we will not call it that. Dobedo is funded by The Wallenberg group (Ericsson/SAAB), via their venture capital arm Novare Kapital, making it their first Internet entertainment venture.Revenue comes from traditional banner advertising. And there are some innovative ideas, such as co-branding events A company can have a chat room within Dobedo. There is also sponsorship; at a party in the Swedish Dobedo, 300 bags of crisps were handed out by the biggest crisp manufacturer in Sweden; users can pick them up within the chat room."We will never do commercial activity that interferes with the community experience," Osterdahl says. We believe that just as Disney is for this century, Dobedo will be for the next.

We aim to be a bit like MTV for the next generation; to be the European youth and lifestyle brand on the Internet."There are already plans for a Dobedo animated film. And, of course, the strong graphics and appealing characteristics offer enormous brand potential for merchandising and spin-off marketing. We want to be the first big youth entertainment brand for the Internet This is new, and it's virgin territory. Some users are upgraded to sheriffs, and they have the power to "zap" anyone who's behaving badly, which means that their character turns into a cloud and they are chucked off the site."In these chat rooms people come in for first time and go, `fuckyoufuckyou'," Osterdahl says "We avoid this by using our regulars as sheriffs. There isn't a Big Brother feeling - young people don't like that because they believe the Internet is all about freedom of speech It is. But, at the same time, Dobedo is another world and it has a constitution that you must follow if you want to play the game."Hopefully it will be a starting-point for young people surfing the Net. And it's a new type of social life where you can interact with people you wouldn't normally be able to meet, because they live far away from you."Everyone using the site is considered a "loyal user", but there are a couple of thousand "regulars" who use it every day - the average chat time is 25 minutes.