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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (54125)	4/4/2000 4:07:00 PM
From: ztect	Respond to of 122087

Here's another interesting read re: overstated earnings ............... This is a case study: Imagine how the issues addressed pertain to less august technology companies. "At Cisco, Options Machine Churns Unfettered" By DAVID LEONHARDT nytimes.com. Cisco Systems, the Internet equipment maker that is one of the three most valuable companies in the world, is a good case study. The company is a heavy user of stock options, the form of pay that accounting rules say does not have to be counted against earnings. Last July, Cisco's employees held some 439 million outstanding options. Cisco says that giving large option grants to managers ties their pay to the company's performance -- and few investors would argue with Cisco's performance. But some institutional investors and management experts are worried about the long-term cost of giving employees large, discounted stakes in their companies..... ...Cisco reported $2.1 billion in net income in 1999, but accounting for options would have erased $500 million of that [earnings], according to a footnote in the annual report. That would amount to a 24 percent reduction in earnings per share. ................. for complete article click link above ========================================= footnote. Executive Compensation too high? CEO of Cisco, John Chambers Compensation Total of Direct '99 Compensation and profits from options in '99 $121,700,129 Estimated current value of option granted in '99 $158,565,500 (as of Sunday April 2,2000) Value of Options of all options held at end of '99 fiscal year $482,452,705