william -
If, instead of giving you $100,000 cash pay, I give you options which are valued by the market at $100,000, this is the same effect on my finances. Because I could have, instead of giving you the options, sold them at fair market value for $100,000. After I give you the options, you can sell them at market value too.
I agree but only if you would have sold them. In Intel's case I don't think they would have sold them so they aren't losing the $100K. Do you think Intel would have sold CCs if they hadn't granted those options? If we extend your reasoning then everyone who holds shares and doesn't sell Calls is losing money and should declare that as an expense.
The next effect has the same impact on my finances (modulo commissions and slippage) as if I just sold the options and gave you the money: I have $100,000 less than I would have if I'd given the options to the market, you have $100,000 more by selling them to the market.
So again, your reasoning requires that you would have sold the options if you hadn't granted them instead. I don't think that assumption is valid. If you can show me where Intel has a policy of consistently selling Calls on the open market then you will have a solid case. Otherwise all Intel has done is place a cap on the potential upside of shares they hold in inventory, which is opportunity lost. My opinion is that this shouldn't represent an expense at the time of the grant. All imho. |
