If I were offered the chance to exchange pay for options now, there would be no way I would take the bait because I don't think technology will recover intact from this onslaught.
So it seems that we may finally beginning to reach a period where it could be construed that employees are forcing companies to expense stock options in a sense---by demanding cash instead of options. This would lend suppport to the conclusion that this compensation expense was there all along, but the company was just able to temporarily mask it by not reporting the expense on the income statement. Although in your case, your decision to take cash is related to concern over a possible FASB decision that would require companies to expense stock options which in turn you believe would depress stock prices, I suspect other employees may have come to the same conclusion to take cash instead of options even prior to the recent FASB announcement that increased the odds of stock options being expensed.
The thing about not expensing stock options, imo, is that is similar to a cortizone shot that temporarily masks the real underlying, economic performance of the firm. Eventually the real, underlying performance of the firm comes out regardless of what the FASB does. And like a cortizone shot, the ability of the shot to provide feel good results diminishes over time.
Imo, companies like Intel will be better off by facing the music now, and expensing stock options on the income statement now. I think Intel still has an opportunity to run a sound stock options policy before things get totally out of hand. Other companies, like SEBL, for instance, have gone off the deep end. The company is a cortizone shot addict and it is finding it harder and harder to find any way to get relief and get the company on track for legitimate economic performance.
I am in agreement with Carl that going down the road of merrily increasing the grant rate to the inner circle is a very disturbing trend that can lead to bad results for everyone concerned, including the inner circle if they plan to hold any long term stock. It is short sighted management imo, something that I would not normally associate with Intel. On the other hand, Intel has some pressure to to be competitive with their executive compensation packages with the rest of the tech industry, which in its entirey is based on a questionable business model---that of giving out lots of stock options and treating them as though they are free on the financial reports.
In some respects, I think it is entirely possible that a FASB decision to expense stock options would be a blessing in disguise for Intel, and perhaps get them back on track to managing for legitimate shareholder value---like they unquestionably did for many years.
JMO, Huey |
