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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.28-0.8%3:18 PM EST
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To: PerryA who wrote (64520)9/14/2003 4:11:43 AM
From: Don Lloyd  Read Replies (2) of 77400
 
Perry,

Giving people something they want and value as compensation for employment is a business expense, period. Be objective and see it for what it is. You can still favor options as a form of compensation, but don't let abstractions and convoluted rationalizations convince you that it's not really an expense.

It's only an expense to the person or persons who actually pay for it. If a company has the salaries of its executives paid by the Federal Government, those salaries would not be an expense to the company and it would be an exceptionally poor idea to record them as expenses and try to deduct them from taxes.

It is the shareholders who actually pay stock and option compensation expenses. They can pay it in ownership dilution or they can individually restore their ownership positions by buying shares either on the market or from the executives directly. In either case the expense is the cost of the shares and it is paid exactly once.

Regards, Don
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