Duke, re "Does it seem to you that Intel is issuing a disproportionate amount of options based on your understanding of the exercise price, the vesting period and the number of options?"
As to the number of options granted, Intel is the least dilutive of the technology companies for which I track option activity in detail. Here are the annual grant dilutions for INTC, DELL, MSFT, and QCOM These are simple averages over their last 9 fiscal years.
INTC 2.0%
MSFT 3.4% over 8 yrs (MSFT switched to stock grants)
DELL 3.5%
CSCO 4.3%
QCOM 4.4%
And Intel's top 5 compensated executives only receive about 2% of the options. However, I don't have a feel for that relative to other companies.
Additional comments:
Since most companies do much the same with respect to exercise price, vesting schedule, and option life, a judgment based solely on the number of non-tax-qualified options granted annually -- relative to shares outstanding at the beginning of the year -- should be adequate. There are few tax-qualified options.
The norm is an exercise price equal to market price at grant, linear vesting over 4 or 5 years, and expiration in 10 years. The 7 year life for Intel's 2005 grant was unusual. Whether the vesting is annually, quarterly, or monthly makes little difference.
Ron |
