Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 174.58

-1.2%

12:21 PM EST

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To: carranza2 who wrote (114259)	2/25/2002 11:06:35 AM
From: Stock Farmer	Read Replies (2) of 152472

Just exactly how do you propose that talented engineers--the kind that makes wizardry like GSM1x work--be compensated? A week's salary and a ham at Christmas time? Free pastries and coffee on Fridays? Exactly? With stock options, of course. Just account for them properly!! Don't blow a million bucks of real compensation under the rug! Even the free pastries and coffee on Fridays shows up on the books. But you think options shouldn't? I have been quite up front stating why I hold my view that options are compensation. Quite up front showing that they have a real cost that doesn't appear on the books. But never would I dare to say that companies should stop giving them out. That would be nuts. Seems like you find the things pretty valuable. Seems like engineer was quite articulate about how these things are motivating and enriching. I agree with him and with you. Glancing at my option-enhanced early retirement portfolio there is absolutely no question. Keep 'em coming!!!! So they are valuable. We have established that. Engineers won't work wizardry without them. We have established that. And we have established that companies put them on their books at a cost of zero. And you ask "so what?" You (shareholders) are parting with something at a putative cost of Zero that you know darn well is worth way more than a week's salary and a ham at Christmas time. And you compute PEs and pro-forma profitability in order to compute upwards predictions for stock prices without nary a glance at the real cost of getting the wizardy done. What responsible engineer would compute a thermal budget assuming ambient temperature was absolute zero? Or a slew tolerance assuming jitter is zero. Or discrimination window assuming noise is zero. And so on and so on. Why would this same person ignore a key piece of the cost equation when computing the profitability of a company? It's really bothering a few folks who invested in Enron that stuff with a few billion dollars of real cost [debt] was put on the books at zero. It's bothering a few folks at Global Crossing that stuff worth zero was put on the books as if it was worth a few billions [swaps]. This is exactly the same thing folks. Hand out treats that are worth a few billions, directly to insiders I might add, and put a big fat zero in the cost column. The difference is that this one's perfectly legal! Not only that, but some of the brightest minds on the planet (folks posting here, yourself included judging by your past posts) don't seem to get it that the result is that the company's financial performance is way overstated. Or don't seem to care. Which has the same result. "Everybody does it". Gee. No wonder. John

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