**Kyocera, Cost-Plus, Options, Employees**
Question: Should the cost of employee stock options be charged to Kyocera?
QPE's services will be provided, exclusively, to Kyocera for three years on a "cost plus" basis.
You guys have been talking about employee stock options, so I could not help but think about the topic. I know many people will want to ignore this topic, but I wonder how will "cost" be determined when they said "cost plus". That is, will the cost of employee stock options be charged to Kyocera by Qualcomm (somehow I doubt it, so Kyocera got a great deal; and we, as shareholders, will be paying for the difference).
I believe we are talking about over 2,000 engineers and marketing types. We are talking about a very large sum of "cost" when it comes the value of these options.
A very wise man wrote: "Whatever the merits of options may be, their accounting treatment is outrageous ... If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And, if expenses shouldn't go into the calculation of earnings, where in the world should they go?"
Here is the link to the quote for those who are interested (look under "Accounting -- Part 1"):
berkshirehathaway.com
p.s. This is not a criticism of this management in any way. However, I believe it is something we should think about as shareholders. Would be nice if they addressed this issue in the contract. |
