SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Don Lloyd who wrote (16443)8/9/2002 12:53:52 PM
From: Simba  Read Replies (1) of 42834
 
Don:

I think you did not get my point. First of all no cash is being paid by the shareholder to the optionee directly. There is no direct cash expense for the shareholder. You are imputing this expense from the taxed being paid by the optionee but the same expense can be imputed to the corporation as well. This is particularly true for a buy-and-holder of the stock. He never sells so you cannot even impute a cash expense on such a shareholder. In particular the shareholder cannot show an expense or a capital loss on his W2 just like he cannot do so on any stock that he has not yet sold at a loss.

The CEO and CFOs of Intel, CSCO claim it is unfair to show a non-cash expense at the time (read quarter) of exercise of the stock. Their claim is accounting experts have no clear method to charge the expense, the amount of it and also the timing of it.

The same issues exist for the shareholder who has did not sell in the same quarter as when the options are exercised. He does not have a capital loss (or a cash expense) until he sells. The company should not get a tax deduction for this and get artificial saving which they can re-invest compared to a company which pays expense by direct cash or stock.

Basically the CEOs who do not want to take a non-cash expense cannot have the cake and eat it too. Either take a non-cash expense with its attendant difficulties or don't take it but then become ineligible for the tax deduction.

Simba
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News