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Technology Stocks : Intel Corporation (INTC)
INTC 36.82+1.5%Dec 19 9:30 AM EST
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To: willcousa who wrote (180918)4/28/2005 3:19:14 PM
From: rkral  Read Replies (2) of 186894
 
willcousa, I look at the options as compensation in-lieu of cash. So if an employee receives $100k in options ... it's the same as having received $100k in cash with which to purchase $100k worth of options ... a mandatory purchase if you will.

So let's say the employee gets $100k worth of options every year ... and the end result for three of those years is that the options expire worthless. Then the employee has to make $300k for the other two years just to break even.

IOW the options that expire worthless are a loss to the employee ... because the employee could have negotiated cash compensation instead.

Now if you're talking repricing of existing options ... which I don't think you are ... I would agree with you.

Ron
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