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Vignette venture capital plan to distribute income to employees

The software maker launches a program to invest $50 million in start-ups and will split half the investment returns with its employees.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
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Kim Girard
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Vignette launched a plan to invest $50 million in start-ups this year and will split half the investment returns with its employees.

Under its new Venture Investment Program (VIP), half of any investment income will be divided among employees ranked below the senior vice president level, while the other half will be re-invested in other start-ups, said William Daniel, senior vice president of products at Vignette. Earnings will be distributed over a four-year vesting schedule.

"These are going to be big numbers, in the millions," Daniel predicted. Net commerce software maker Vignette has about 1,000 employees.

While many companies have launched venture capital programs--including Andersen Consulting, EDS, Oracle, Vignette, Time Warner, Scient and Cambridge Technology Partners--few are doling out the rewards to their rank-and-file employees. Vignette decided to do so to boost employee retention, though to date it hasn't been an issue for the company, which had the sixth-most-successful IPO last year, Daniel said.

So far, Vignette stockholders have had little to frown about. Shares have risen more than 21-fold since the company's February 1999 offering. Austin, Texas-based Vignette, which makes publishing and personalization software for e-commerce firms and competes with Broadvision, today finished regular trading at 1 p.m. PST at 201.13 a share, down 2.2 percent.

Under VIP, Vignette has invested in Vitessa, an e-commerce outsourcing company, Bizrate.com, which tabulates surveys of consumers regarding their online shopping experiences, and iSyndicate, which provides content syndication services to Web sites.

Vignette will have to count all of the additional employee stock earnings as expenses when it reports quarterly results, Daniel said. Morgan Stanley, the leader underwriter on Vignette's IPO, is in charge the VIP program.

CNET, publisher of News.com, is an investor in Vignette.