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Technology Stocks : Dell Technologies Inc.

DELL 133.78

-0.1%

Nov 14 9:30 AM EST

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To: Jack T. Pearson who wrote (42700)	5/17/1998 3:30:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Jack, I don't think the issue is the level of compensation. I believe it is the lack of clear accounting and the fact that options-based compensation is easily perverted. Just consider one simplified hypothetical example. Suppose officer XYZ has options to buy 10,000 shares of Dell at $20. In order to avoid dilution, the company needs to purchase 10,000 shares on the open market @$90, for which it receives $20 from Mr XYZ. The decrease in cash is $700,000, but this amount never appears on the income statement as an expense. You must ferret this stuff out from the statement of changes in equity and financial footnotes. If it were me, this information would appear on the income statement as an expense. Currently, it does not. This example is highly simplified, and was simply generated to show in the most general terms how this sort of thing works. TTFN, CTC

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