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Technology Stocks : All About Sun Microsystems

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To: Charles Tutt who wrote (50684)7/25/2002 12:35:40 AM
From: DiViT  Read Replies (1) of 64865
 
Then we agree that one can not simply do as you suggested.

"Why not just treat them as what they are? On the day they're granted, the employee has income of their fair value and the employer has a compensation expense of that same amount. The employer also enters into its investment portfolio a short call position, the value/exposure of which is periodically marked to market.

Which leaves an interesting dilema on how to provide for incentive based compensation, that gets the employee personally involved with the performance of the company.
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