OT ... Duke, re "... 3 Billion dollars for options that are now underwater...and will probably expire [worthless, before vesting date]""
Mr. Barrett said nothing about the "vesting date". He said the options "probably won't ever be exercised", which is a reference to the expiration date. Here's the whole enchilada, .. the options part anyway.
nyvidsrch.bloomberg.com
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Dylan Ratigan of Blooberg TV: The Federal Accounting Standards Board today voted 7-0 to take up rule-making on the expensing of stock options with the idea of having rules made, and the anticipation is that you will be forced to expense them within the next 12 months.
Faced with this apparent move to expense stock options, how do you respond? What is the impact for the technology universe and intel?
Craig Barrett of Intel: I think it will be unfortunate if, in fact, FASB moves ahead with a doctrine to expense options. If you looked over the last six or seven years at Intel we would have been charged over $3 billion in expense for stock options which are today under water.
And if that's not uncertainty, I don't know what is. I mean, how cloudy can the market be when you are charging companies billions of dollars in expense when, in fact, the vehicle for that expense, the stock options, are under water and probably won't ever be exercised?
So what we're going to do is confuse the market even more if we move ahead.
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Mr. Ratigan should have followed up with:
Mr. Barrett, proponents of option expensing will claim Intel could have sold those options to underwriters for $3 billion, and by granting the options to employees instead, Intel effectively compensated employees with $3 billion. How do you respond to that?
Ron |
