How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 478.53

-1.0%

Dec 12 9:30 AM EST

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To: PJ Strifas who wrote (44178)	5/3/2000 10:13:00 AM
From: rudedog	Read Replies (1) of 74651

Peter - I do believe that the use of ESOP in lieu of salary, and "pooling of interest" accounting for acquisitions, are mechanisms governed by rules which don't fit the way high tech is doing business today. When ESOP was a small part of the financial picture, and options were granted in small amounts to relatively few senior executives, current methods were adequate. But when option compensation exceeds salary, as it does in many high tech companies, the ESOP has become an important component of corporate finance. I'm not sure there is anything wrong with options per se - the notion that employees are tied to the financial health of the company seems like a good motivation. But the accounting rules need to reflect the real costs and risks to shareholders. The solution is not simple. What I disagree with is the idea that this is some kind of pyramid scheme. It is simply another example of how fast moving companies are "outside the box" of the rules and regulation boys. Accounting practice has not changed much in 100 years.

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