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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 71.08+0.1%Nov 7 9:30 AM EST
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To: Lizzie Tudor who wrote (63753)4/29/2003 7:13:19 PM
From: RetiredNow  Read Replies (2) of 77397
 
Well, let me posit this. It's evident to me that companies feel like American employees costs too much. That's why Chambers said that expensing options may lead to job losses to overseas workers. So if that is the case, why don't they just eliminate the stock options in the first place? I mean if they feel like they are paying too much, then the obvious answer is pay less.

This sounds overly simplistic at first glance, but my theory is that many IT workers are overpaid right now, precisely because there are many IT workers with buku experience that are looking for jobs. So if market theory works correctly, those who do have jobs will realize that they'd better suck it up and keep their current ones even if they no longer get stock options. The alternative is no job to go along with their lack of stock options. I mean where would they go? No one is hiring.

So that leads me to my final point. The answer isn't, as Chambers suggests, that companies shouldn't expense options because that could lead to job loss to overseas workers. Rather, the answer should be, let's ratchet down payscales for IT workers to more realistic levels until we reach the point where supply meets demand. The first phase of that ratcheting downwards can be the elimination of stock options. And perhaps to make it more palatable to current employees they want to keep, they can give them salary raises. Or another alternative is to offer to give a 10% raise to anyone willing to give up future option grants. What I'm saying is that companies need to get creative, not succumb and become destructive.
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