Thread, E&Y's recommendation puts US high-tech at a serious disadvantage.
I believe stockholders get to vote on which accounting firm Intel uses.
- Most of us in high-tech growth companies know some of the best talent gets attracted to high-tech because of the motivating options
- This proposal to expense options will put Coke on improved footing in the recruiting process now. No wonder they are for this proposal. (For those that don't know, Coke's comp plans is reportedly top-heavy with basically the top execs getting options - opposite of high-tech.)
- High-tech issues the majority (around 90%) of their options to the employees as compared to 10% to execs.
- This will have more impact on the bottom 90% of high-tech employees than the top 10%, when factoring in spreads.
- This will impact the US high-tech work force.
- This proposal enhances China's competitiveness in high-tech
- Note where Intel's Capital injections went (check Duke's post). China has large market potential.
- Does this proposal mean it makes better sense for a high-tech company to open a site in China and hire in China rather than at a US site? Everyone is moving to China due to the market potential, is this a another reason to do so?
- Does this proposal mean, if you give Stanford students options, they have to pay an immediate tax (when they don't have the money) rather than pay tax later? Would the same apply to a China-based student?
If this proposal creates a liability, I wonder if a company can cancel options that have been issued to avoid an unexpected liability? And reissue them in other foreign sites?
The proposal sounds potentially harmful to high-tech. Too bad a couple of companies have possibly impacted the competitive advantage high-tech has.
Though, one upside startups will probably have, while it has the potential to negatively impact our US high-tech work force relative to say China's, it could make US startups more attractive relative to large US companies, because large companies will most likely reduce options for everyone including the bottom of their workforce where 90% of their options are issued.
Regards,
Amy J |
