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Technology Stocks : Intel Corporation (INTC)
INTC 36.32-0.2%3:50 PM EST
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To: willcousa who wrote (178216)5/29/2004 2:16:15 PM
From: Lizzie Tudor  Read Replies (1) of 186894
 
we have an alternative for options expensing though... the simple expense at exercise.

I think the fly in the expense at exercise is it casts a little doubt on the claim that options are compensation from *day one* of their existance for an employee. But to me its just like accounting in my small business, I account for the revenue when I get the check and not before.

Anyway it is quite clear that a black-scholes expensing model would kill the "up and comer" companies in their most important growth periods, the JNPRs and RHATs of the world, I mean. I don't think congress wants to create a climate that overly taxes the JNPRs of the world, there is something almost socialist about it imho. Otoh an expense at exercise would work, even though its still a lot of money, because theoretically employees would want to hold through the tornado growth cycle (and not exercise) and any noise like 20 pt swing days for the stock price would be mitigated somewhat.

When I was totally against options expensing I hoped that the pro-expensers would latch on to black scholes and not let go, because I knew it would never fly- it doesn't work with new issues who are precisely the companies that use options most. Now we're back to square one with 3 more years of a "study" for options expensing.
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