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Technology Stocks : Dell Technologies Inc.
DELL 133.78-0.1%Nov 14 9:30 AM EST
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To: stock bull who wrote (135152)7/1/1999 12:35:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Stock Bull, the answer is quite simple: employee stock options. The ESO program is how we (the shareholders) agreed to compensate management. For tax reasons beyond my ken (having to do with alternative minimum taxes - AMT) managers find it financially advantageous to exercise options and immediately sell the stock.

Only when shareholders get sufficiently fed up with the horrendous practice of using stock options as a surrogate for salaries and bonuses (which companies like because it allows them to understate the cost of doing business because the cost of the options is not an income statement item) will this practice end.

As a matter of course, I always vote against options when I receive a proxy statement. I suggest that the rest of the thread does likewise. As a side note, Warren Buffet always terminates employee stock options when he acquires a company, because he feels that this subterfuge is bad for investors.

TTFN,
CTC
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