SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.18-1.0%2:23 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Don Lloyd who wrote (64526)9/14/2003 2:45:08 PM
From: Stock Farmer  Read Replies (1) of 77400
 
Options, or stock, should be granted IF, and only IF, doing so benefits shareholders.

Same applies to cash wages.

Which are an expense.

Just about every expense of the business (including issuing of options) is done with the express intent of making shareholders more wealthy.

If I am a manager and spend $1 in wages to my employee and attract $100 from his effort, that $1 is an expense and the $99 difference is quite beneficial to the shareholders.

If I spend $0 but instead promise him 1/100'th of what I'll get in the end and thus attract the same $100, then that promise is obviously an expense of the same magnitude as the cash payment of $1. And shareholders obviously still benefit by that same $99. Heck, maybe he even works harder and I get more than $100.

But how I settle that promise relative to other promises I have made (e.g. to shareholders) is immaterial and irrelevant to whether or not it is an expense in the first place. It was clearly part and parcel of the price I paid to attract revenues, and thus the monetary value of that cost IS an expense that I incurred through my management decisions. Without question.

And so I have an obligation to record the magnitude of that expense against the profits in my report to shareholders so that they can know how effective I am with their capital in generating real returns.

John
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News