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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs

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To: Mick Mørmøny who wrote (704)9/6/2004 8:39:47 AM
From: rkral of 786
 
Hi Mick, re "New battles may be brewing in a different but related area: taxation of the profits derived from exercising stock options. "

For some time now, I've been suspecting that taxation is the *real* reason that companies are against the expensing of options. People like John Chambers, Craig Barrett, and Andy Bryant, are *smart* people. I'm sure they know options are compensation.

But accounting recognition of the transfer of value upon grant -- more accurately, upon completing the terms of the option agreement -- will raise the question "Why isn't this value transfer taxed?" After all, it's like the company paid $X which the employee uses to buy $X of options.

Thanks for posting articles here, Ron
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