SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Dell Technologies Inc.
DELL 139.01+0.6%2:44 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Chuzzlewit who wrote (138727)8/9/1999 1:09:00 PM
From: GVTucker   of 176387
 
Chuzzlewit, RE: Can you give us the gist of the article?

To start with, the article states the basic premise of the current prevalence of stock options in today's corporate America: "Accounting rules mean that companies do not normally have to treat options as an expense.... So options have become a cheap way to pay top staff."

It goes on to state why this may be short term efficient but a long term problem.

First, in times of a prolonged decline in stock prices, a company has to choose between two difficult options: have an underpaid staff or reprice the options.

Second, options dilute current owners' equity.

Third, management ladened with stock options may have a problem with risk/reward. Specifically, there is a temptation to do something like increase debt in order to finance stock buy backs.

There's a lot more detail there, and even though all of these points have been discussed ad nauseum in many different forums, this Economist article does a good job of bringing all of the issues together.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News