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To: The Phoenix who wrote (51531)	5/21/2000 8:01:00 PM
From: Stcgg	Read Replies (1) \| Respond to of 99985

Gary.. Even profit sharing under legal accounting methods is expensed on a company's P&L.. The question stands, how much of this New Era is Accounting fluff? >><<

To: The Phoenix who wrote (51531)	5/21/2000 9:54:00 PM
From: westes	Read Replies (1) \| Respond to of 99985

The assumption that employees are paid in options is not only NOT ludicrous, but it is the standard practice in Silicon Valley. It is now commonplace for employees to make $80K in salary and $200K in options profits. And in fact it is the surplus from those stock option sales that allows employees to afford the cost of housing in the Bay Area. [The stock market boom has unfortunately only aggravated the situation by causing an asset bubble in housing prices that match the asset boom in the stock market itself. My friend's parents in Portola Valley recently had a $20M offer on a home that is a modest residence with a nice view, which would not have fetched more than $2M two years ago. Just last week an eleven acre parcel in Woodside fetched a record $52M - for the LAND alone!] You consider the dilutive issuance of stock options to employees to be profit sharing? What planet taught you this method of accounting? And you try to pass off this kind of ridiculous assertion as authoritative because you are "in the industry." Well I'm in the industry too, and I don't think you have a point, and your entire post is an assertion not a reasoned argument. Profit sharing is where you take the profit of the business - the cash - and you distribute that cash to employees. That distribution is recorded against expenses, and it reduces earnings as reflected to shareholders. The entire house of cards which is NASDAQ stock option compensation is premised on an ever-increasing stock price. That won't happen forever, though, and history inevitably brings all asset bubbles to parity with historical valuations. No doubt NASDAQ companies will continue to grow earnings, but that means absolutely zero when the current price of the stock ALREADY reflects another 15 years of continuous growth of earnings at the same rate, a fact which is highly unlikely for any company except maybe a Microsoft.