Duke, RE: DO NOT CONFUSE DISCLOSURE AND CONTROL OF COMPENSATION AGREEMENTS WITH their financial and tax effect. I have studied this problem years before you knew it was a problem.
While we disagree on the option expensing issue, the importance of that is minor to what you say above.
To many in this entire debate, the issue of whether options are good or bad is one and the same with the option expensing issue and tax issues. On the contrary, as you say, they are very different.
No matter whether options are expensed or not, whether the tax break is given for options or not, the disclosure is there already. The shareholders are already in control. TIAA-CREF's proposal to their 50 largest holdings recently demonstrated that. 48 of the 50 agreed to put the issue to shareholders.
Heck, look at Intel. There's a vote right there, on the proxy statement. If you're a shareholder and you don't like the way Intel keeps options off the income statement, you've got a say. Vote contrary to Barrett's recommendation.
On whether or not employee stock options are good or bad, the market will do just fine making that judgement on its own. Heck, even on the other side of the ledger, looking solely at the financial statements, the market will solve that issue, too. And so that leaves only one problem that would need real intervention, the tax break given to corporations.
As a rather active participant in all this for a while, sorry about that. Everyone else that wants to continue this, fine. If I have anything else to add on ESO's, I'll do it over on the ESO thread. |
