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Technology Stocks : Intel Corporation (INTC)
INTC 36.20+0.1%Dec 26 9:30 AM EST
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To: Elmer Phud who wrote (178321)6/16/2004 7:20:17 PM
From: rkral  Read Replies (1) of 186894
 
elmerp, re "The argument has been when to expense the value. "
Whose argument? In what forum? There's been some discussion here on SI, of course, but I'm not aware of any discussion by anyone of consequence. Did Craig Barrett say Intel would expense options at exercise. Did John Chambers of Cisco say anything along those lines? Did John Doerr of Kleiner, Perkins, Caufield, and Byers?

re "As no loss is suffered at grant I don't see any need to expense them at that time. "
Employees and companies are bartering employee services for lottery tickets on part ownership of a company other stockholders already own. Those lottery tickets have a finite non-zero chance of being drawn. Non-employees must use after-tax dollars to buy equivalent lottery tickets.

re " gave an example of a proposed bonus where an employee would receive a sum if performance goals were met. That no doubt has value to the employee but has the company suffered at loss at the time the bonus was promised? "
Bad example. Accruals for this promised bonus would be expensed over the (estimated) period of time required to accomplish the goals. It's not much different an ESO. The grant day value would be expensed over the vesting period.

re "They are of some value to the employee. The discussion is if there is a corresponding loss to the company that needs to be expensed immediately."
Not immediately. Just sometime before vesting.

re "I can't see a loss and I can't see a difference."
Try harder.

Ron
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