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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Ilaine who wrote (28203)1/29/2003 11:33:27 PM
From: LLCF  Read Replies (1) of 74559
 
<But when an employee accept options in lieu of compensation, there is always the risk that the compensation will not be forthcoming.>

1.) That's a side show... not what the article is concerned with.
2.) That's NOT why companies use them or why employees take them.
3.) The stock may also compensate or not.

<The employer and employee typically value the options as more valuable than they would be if sold in the marketplace because both employer and employee agree that the company will be more valuable in the future.>

Not relevant to the topic... but also makes little sense. There are billions of notional value MSFT options around, the employee could take cash and buy them himself. Also makes little sense because if management thought the options were so valuable they would be foolish to use them.

DAK
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