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Technology Stocks : Intel Corporation (INTC)
INTC 37.31-0.5%2:29 PM EST
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To: Elmer Phud who wrote (180920)4/28/2005 1:48:01 PM
From: ChipGeek  Read Replies (3) of 186894
 
Isn't it true that if a company reprices an option, that this becomes a true expense on the books? ie, a company is essentially making up the difference between an exercise price and the stock's true (lower) value? And this is an expense against earnings? I seem to remember reading that once, but am not sure.

I have no data to back me up, but my perception is that the practice of repricing options is not very widespread at all. At least not among the big boys like Dell, Cisco, et al. For one thing, it simply makes no sense from a motivation point of view. You want your employees working hard so they are rewarded by their stock gains; if they knew they would be rewarded regardless, then what is the point? This is precisely the logical conclusion that Intel has come to, and I have to believe that any credible BoD will come to the same conclusion.

Of course, that didn't stop AMD from re-pricing Jerry's options several times back in the day. I'll let others defend the credibility of AMD, though...
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