hb -
I agree about the buybacks, and their connection to the option grants, somewhat tenuous though it is.
[...the tax rebates have allowed various technology behemoths to report profits that would otherwise not exist....]
I have reservations on this one, although I'm not sure exactly what your argument is. My understanding is that the tax deductions are limited to the balance sheet, and to not effect the income statement at all ( I'd like confirmation/non-confirmation of this, including if they affect the effective tax rate on the income statement). I suspect that you are saying that what I called the 'phantom bonus' is missing and that fact means that the company is underpaying for labor. My view is that anything that attracts and retains desired employees is fair game, to the extent that shareholders are not harmed. If a company is able to attract certain employees at low wage rates because they are located in a clean air, mountain, ski resort region, it is simply a natural advantage, not an item to add an expense line for. There is no question that the ability of a given company to in fact trade options for increased salaries, requires a company-specific advantage that the options are indeed considered desirable.
Regards, Don |
