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To: StaggerLee who wrote (8201)	12/3/1999 6:44:00 PM
From: whitephosphorus	Respond to of 13157

C'mon Stagger- with options at least Birds do it, bees do it, oh my God every company does it...... Go figure

To: StaggerLee who wrote (8201)	12/5/1999 10:10:00 PM
From: Mike Fredericks	Read Replies (1) \| Respond to of 13157

Ok, SARS are settled with cash; options are settled with stock. Either way, the company gives up something of equal economic value, which reduces the stock price identically. Since the stock price is based on the economic value of the company, there is no benefit to options over SARS. Stagger- You are wrong, plain and simple. It's clear you don't understand the math behind this. The company gives away either $x of stock or $x of cash. However, while the $x of cash costs the company $x, the $x of stock costs the company $0. Zero. Zilch. There is an opportunity cost there, in that theoretically the company could have sold that stock on the open market. However, the cost to the bottom line is very different. With SAR's the net assets of the company are used to reward the employees, so the net assets decline. With options, the assets don't decline, meaning the company has the same value (the stock shares are valued less because of dilution, but the market cap should remain the same). I'd rather deal with dilution of stock than declining assets. You are focusing on the value to the employee rather than the cost to the company. The whole point is that the value to the employee is the same, but the cost to the company is far far less. Options are far far better than SAR's. -Mike