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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: Dave who wrote (47705)	2/1/2001 10:55:33 AM
From: GVTucker	Read Replies (3) of 77400

The one problem with incentive stock options that we really haven't seen yet is in the area of risk. When things are going poorly for a company, a workforce that is compensated heavily with options rather than cash will have the incentive to take on a large degree of risk, particularly if the options are out of the money. That degree of risk could potentially not be consistent with maximizing shareholder value. I have seen this happen a number of times in isolated situations. If this slowdown worsens, you'll see it happen a whole lot more.

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