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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.69

+0.4%

Jan 21 3:59 PM EST

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To: RetiredNow who wrote (64078)	5/16/2003 8:47:05 AM
From: Stock Farmer	Read Replies (2) of 77400

There's very little in terms of options incentives that can't be replicated using cash. In fact, the company could replicate an option incentive package entirely using cash. They can declare a bonus, payable at the employee's sole option over a period of years provided that the employee continues to work for the company through this period. And subject to other restrictions (e.g. vesting, forfeit...). The amount of bonus being the amount that the stock price has appreciated from the date that the bonus was declared to the date that the employee elects to take payment. They could even pay the bonus in shares and/or issue shares to finance payment of the bonus. Tax consequences to the company would be identical. Tax consequences to the employee would be identical. The company could create exactly the kind of employee loyalty it's looking for, create exactly the same alignment with shareholders, reduce employee wages. Just like stock options. Except, of course, it would show up on the company's incomes statement ;) John

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