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Technology Stocks : Ascend Communications (ASND)
ASND 210.50+0.5%Nov 21 9:30 AM EST
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To: Chuzzlewit who wrote (60563)4/4/1999 8:01:00 PM
From: Dee Jay  Read Replies (1) of 61433
 
culled from the article on stock options:
"To be sure, stock options are viewed as an important way to motivate employees and management. "You work differently; you work smarter," said Matt Ward, chief executive of WestWard Pay Strategies, a consulting concern in San Francisco. "Everybody's there to get the mission accomplished" -- that is, to bolster shareholder returns. "

Anybody who goes with a start up, for example, is taking a huge risk. If he/she is instrumental in its success then the option's value stems in part from that effort.

While it seems to be a problem it's fairly well confined to high tech and that's because of the huge valuations put on those stocks; the valuations come from investors who push up the price of the shares in the expectations of rich rewards, but if these same investors are complaining about the rich rewards the option holders receive that does seem a bit unfair.

I had an option with a company that wasn't high tech but was a Wall St. darling at the time and I felt no guilt about being able to cash in those shares for a good reward, but I helped that business grow. Higher management had better options and they deserved every penny they got for having the business plan and adapting it as circumstances changed; they made the company successful, not outside investors buying stock on the open market who were cashng in on the success of the company.

As for Graef Crystal, he has his followers and he has his detractors for his exuberant cricisms that are excessive at times. He does serve a useful purpose but not here, IMHO.

Dee Jay
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