PSFT - Fiscal 1998 - Discussion for the next year Message Board

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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year

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Oct 29 5:00 PM EST

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To: Chuzzlewit who wrote (2118)	9/3/1998 11:51:00 PM
From: RetiredNow	Read Replies (1) of 4509

Chuzz, just checked the financials of one company and if they had reported compensation costs in the income statement for the FY 97 their income would have been 13% lower. Now the question is does accounting procedures make a difference to employees. My first response is that not really. I am happy that I get the options. It makes me that much richer, and more loyal to the company that's treated me well. So I believe I am incented to do better at this company. Now the other thing that the article (which was very good, BTW) doesn't mention is that whether dilution occurs or not depends on how the company handles it's stock. In the case of my company, they routinely reacquire more stock than options are issued each year. So the net effect is zero on EPS. Sure income may have been lower by the amount of compensation cost, but it would also have been higher by the realized gain on the stock reacquired. So what it boils down to for this company at least is that options are a great way to compensate employees.

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