Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 49.36

+1.3%

9:57 AM EST

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To: rkral who wrote (177815)	5/6/2004 9:07:23 PM
From: Elmer Phud	Read Replies (1) of 186894

rkral In effect, the company pays the employee $X with which the employee buys call options valued at $X and so it's (incorrectly IMO) called non-cash compensation. So the employee is a call buyer and the company is a call writer (seller) .. but it's not a CC. Sorry but this makes no sense. The company hasn't paid out a dime so they haven't paid the employee $X. Additionally the company is obligated to deliver shares at the option holders demand and at the strike price. The company holds the shares so by this point it is indistinguishable from a CC except no premium changed hands. If you want to claim an expense the only one you can come up with is the opportunity lost in granting the option to the receiver at no cost instead of selling it on the open market. I just don't consider opportunity lost to be a justifiable expense nor an immediate tangible one. You of course are free to form your own opinion.

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