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Technology Stocks : All About Sun Microsystems
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To: Charles Tutt who wrote (50675)7/24/2002 8:59:58 PM
From: CYBERKEN  Read Replies (1) of 64865
 
The matching principle is not satisfied. The company is paying for future results with options, not current ones. If the results have been realized, the company should simply be paying a bonus. Also the cash available for the employee to pay the tax would have to be lent to him at the time of the grant, a counterproductive practice.

Should options be made artificially unattractive, there would be no real reform. They would be abandoned in favor of the employment contract being re-written to promise future grants of actual stock, based on certain milestones, and the share-issue count adjusted for market price throughout. (That's a little like issuing your executive staff floorless convertibles).

My point is that we know what's wrong now when options are abused, but the issue of what to change is complex. You almost need a FASB-like organization to study it for several months...Gee...
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