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 : Intel Corporation (INTC)
INTC 40.01+1.7%Jan 6 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GVTucker who wrote (172981)2/10/2003 5:52:43 PM
From: The Duke of URL©   of 186894
 
If the company gives shares outright to its employees, as you suggest, there is no cash outlay but the gift defeats the purpose. There is no incentive for the employee to continue to perform, he has already received the consideration in his pocket.

An ESOP (an Employee stock retirement plan) is a way to give stock, but it does not vest (permantly belong) to the employee until a condition is met, usually retirement after years of faithful service. Termination of the employee for cause usually results in termination of non vested stock, and forfeiture. It also costs the company no cash.

But the concept of a corporation in business is that of a separate entity from the shareholders. The shareholders collectively own the corporation the are NOT the corporation. This is the way the law and the tax and the investment works. A corporation has been a separate entity from it shareholders for 4 or 5 hundred years now.

A shareholder loss is NOT a corporate loss. No matter how emotional the argument.

It is a disclosure issue, not a profit and loss issue. It is a balance sheet item not an income item. It appears on the balance sheet not on the income statement. Accountingwise.

There should be disclosure when and how the option is granted not to wait until the stock option is exercised or the stock sold.

But the interests should be aligned. That is why this new dividend tax exclusion rule would be so beneficial. It will tie the profit interest of the corporation much more closley with its shareholders.

Don't you agree?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News