Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 50.25

+4.1%

9:39 AM EST

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To: Saturn V who wrote (180906)	4/27/2005 9:13:53 AM
From: willcousa	Read Replies (1) of 186894

The fact is that in stocks as volitile as semiconductors a CEO has little to do with the highs and lows. They have a lot to do with moving the company forward on a long term basis. Stock options enable the top employees to benefit from the cyclicality of the stock because they have nothing invested in the options. A shareholder has to put out front money at market price to get the same strike price. I think options are inappropriate for these businesses as a reward mechanism. They are fine if all you want to do is make someone rich. Think in contrast about a 401k invested in the company's stock. The employee is then locked into the long term performance of the stock in the same way that a long term investor is. Then their interests are closely aligned. With options volitility is the employee's friend. Whenever the stock price shoots up enough to ensure a healthy profit the employee exercises and gets out or at least sells enough to cover his investment and tax cost. He then sits with the remainder of his shares for free.

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