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Technology Stocks : Intel Corporation (INTC)
INTC 45.51+10.7%Jan 9 9:30 AM EST
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To: Raymond Thomas who started this subject2/12/2003 10:10:32 AM
From: Jacques Newey  Read Replies (1) of 186894
 
CEO's as Central Bankers

"Executives hide behind the argument that their employee warrants are not "freely tradable" and are therefore not worth anything. Nonsense. Right now give me a 10-year option on your house at today's market price and I'll agree that I can't sell it or trade it, I can only exercise it. Have I gained anything of value and have you lost anything of value? Of course. To suggest otherwise is insulting. And besides, the "freely tradable" argument focuses on what happens to the executive, when the legal obligation is to focus on what happens to the shareholder.

The Reality Of The Transaction

The way to show what is really happening in these employee warrant transactions is to show the transaction management had a legal obligation to do, but did not.

And that would be for the company to do a public offering of 10-year at-the-money warrants. Sell them to investors; that determines their current market value. Bring that cash into the corporate treasury . . . . . and then hand all that cash to the executives and expense it as compensation. (Wouldn't the shareholders love that! The company sells securities and insiders get the money!) Because that is exactly what is happening here. The result to the shareholder is the same: his company has issued new warrants and yet the company has no cash to show for it."

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