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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 80.25

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3:59 PM EST

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To: RetiredNow who wrote (61138)	8/29/2002 10:01:52 AM
From: hueyone	Read Replies (3) of 77400

They should all do what Chambers did and drop their salaries to $1. Now that's being a good leader. Come on Mindmeld. Those zero and one dollar salaries that CEOs sometimes take are almost always nothing but a ruse designed to distract from massive stock option income or the receipt of massive new stock option grants. The company (Cendant) also said Wednesday it would begin expensing stock option grants on Jan. 1 at a cost of between 3 cents and 4 cents per share in 2003. I don't see Cisco stepping up the plate to expense stock options. Of course it would be pretty hard for a company like Cisco who has systematically abused shareholders by granting excessive stock options to do so. Cendant said it will reduce the number of stock options granted to employees and instead give them restricted stock. My understanding is that restricted stock is valued at date of grant and the value is expensed and amortized over the restricted period. In fact, it is a giant inconsistency in accounting that restricted stock, performance options and stock appeciation rights (SARs) all result in an expense on the income statement at one point or another while employee stock options (NQSOs) do not. By the way, when stock options (NQSOs) are given to outsiders---- independent contractors, painters, suppliers, landlords, etcetara, they also generate an expense on the income statements. In my opinion, the lack of expensing for (NQSOs) stock options when they are given to employees is nothing but a loophole designed for the express purpose of enriching insiders at outside shareholders expense. Overall, Cendant is moving towards much more honest and responsible accounting behavior than Cisco is. Best, Huey

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