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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 228.44+0.5%3:59 PM EST
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To: Skeeter Bug who wrote (145337)8/13/2002 12:03:40 PM
From: Oeconomicus  Read Replies (1) of 164684
 
rd, if a company sells shares on the open market and pays an employee half the proceeds, is that an employee expense?

if the company issues an option to an employee and he exercises it at twice his options price, is it an employee expense?

in both examples, the exact same thing occurs. dilution is equal. employee compensation is equal. tax deductions are equal.

Ahh, but we are not talking about matching up book and tax treatment of options. What we are talking about is assuming now what a future exercise and sale scenario might look like if in fact the employee ever vests, pinning a value on it at grant (a higher value the greater the uncertainty about possible scenarios, BTW), and taking it as an (estimated) expense now. If you know with certainty what the outcome will be, as is the case in your scenario, then there's really nothing to debate.
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