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 : Value Investing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TimbaBear who wrote (15035)8/16/2002 11:40:08 PM
From: mepci  Read Replies (1) of 78512
 
TB: Good analysis. I hope you have read my posts on Dell board which covered the subject extensively.
The first mistake is for GAPP to allow the company to play with SE(shareholders equity).
Employee compensation should go into three categories under expenses:
1. Short term: wages
2. Annual: bonuses.
3. multi-year: stock option trust.
4. Retirement: Pension trust.
We have some guidelines for everything except stock options.
Management should not touch SE, except a 2/3 majority vote by shareholders. shareholders can allow % of retained earnings to be moved to option trust. Shareholders need to vote on formulae for determining the distribution of options among employees, so that senior management is not a lopsided beneficiary.
Treasury stock was misused by modern management. Treasury stock should be used only to retire stock for reverse dilution. Actually I don't like a company buying back its stock, unless there is an improved investment strategy. To me a management buying its stock indicates either foul play or incapability use their cash properly.
Finally risk management and actuarial calculations should be used in managing option trust.
I will go one step further. The board should be completely independent and handle the allocation and even management of employees trusts and bonus distribution. CFO should be an employee of the board. Comptroller can handle the money management for operations.
It is amazing how these professionals claim ignorance in understanding fiduciary responsibilities.
Unfortunately Dell shareholders will keep this stock in the 50 p/e ratio, even without counting the losses due to option plans.
Good Luck.
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