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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 171.54+0.4%Nov 10 3:59 PM EST

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To: FactsOnly who wrote (121764)7/18/2002 7:07:51 PM
From: Stock Farmer  Read Replies (1) of 152472
 
Goodluck, that proposal makes sense from a keeping track of things perspective, but it ties up capital unnecessarily.

If we wanted really simple tracking we would just pay employees the cash difference in stock price on a day of their choice over the next ten (or howevermany) years. The employee can elect to top up this amount with their own cash to purchase a share, but they still have to pay the taxes on their bonus. And the company can sell shares in the open market to finance the transaction. That would be the simplest.

Indeed, that has identical economic effect. Stock options merely insert a third party into the cash flow and change the order of some of the transactions. But the beginning and end effects on all parties are identical.

You asked: why could we not keep it simple?

Why do some women shave their legs and wear lipstick?

John
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