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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 75.19

-0.1%

Jan 16 3:59 PM EST

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To: The Phoenix who wrote (47695)	2/1/2001 10:32:42 AM
From: GVTucker	Read Replies (2) of 77400

Phoenix, RE: Rather I believe - again - that options are an incentive for employee's to excel and drive the company to execute. The problem here is that Harvard Business School just recently published a study that disputes that notion. From the study: "Results indicate that no aspect of a company's pay-plan design predicts the company's performance. The primary reason for linking executive pay to performance may be to provide 'cover' for huge payouts to senior management." Indeed, IMO it isn't a coincidence that the option packages became much more popular when the new tax law came into effect that provided a huge disincentive to company's to pay their employees in excess of $1mm salary. Instead of the desired effect, which was to lower executive pay more in line with the rest of the world, it just shifted the means of payment.

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