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To: Mike M2 who wrote (5589)	7/25/2000 10:49:38 AM
From: LLCF	Respond to of 436258

< sound technical merit> You mean 'a way around the problem'. DAK

To: Mike M2 who wrote (5589)	7/25/2000 11:08:53 AM
From: IceShark	Read Replies (2) \| Respond to of 436258

They already do that in the footnotes. Of course this doesn't matter one whit because no one reads the financials much less the footnotes. This concept was carried to extraordinary absurdness by Joy Covey of amzn, remember POS3? -g-, when she introduced "ProForma" accounting in reporting results to the world. Everyone openly laughed at her at first, but it damn near got to be a standard reporting practice. Yikes! The option issue will have to sit on the back burner until the market comes to its senses and crushes companies that pull that crap. That is the only effective tool of change in this matter.

To: Mike M2 who wrote (5589)	7/25/2000 11:33:16 AM
From: Don Lloyd	Read Replies (2) \| Respond to of 436258

Mike - [Don, your argument has sound technical merit but the reality is that in many cases is esops enable employers to payfar less in salary expense than would otherwise be the case. My solution report it both ways - the current deceptive method and the full expense method. Mike] The reality is that such a solution is impossible. Every employee will have his own criterion for what reduction in salary is appropriate for what amount of options. The fact that some employees are willing to accept a lower salary in exchange for option grants is simply an inherent natural advantage of the particular company. If a company is able to attract employees at a lower salary cost because of its location in a clear air, blue sky environment, would you adjust the salary expense entries for this? Only if it has to run an electric blue sky generator in the parking lot. -g- If I give you A in exchange for B, this doesn't mean that we have agreed that A and B have equal value, but, to the extreme contrary, rather that my subjective valuation of B is greater than anything else I could receive in exchange for A, including the discounted present value of any possible future exchange. You are in the exact opposite position as to the relative subjective valuations of A and B. In the case of the options, the employee values the option received as greater than any alternative use of the salary foregone. OTOH, the company values the combination of the reduced salary and any tax advantages as greater than the opportunity cost of the option grants, which is really only magnetic bits in a computer database, IF we allow the effect on shareholders to be encapsulated in the share count increase. btw - Have you seen 'America's Great Depression', by M.N. Rothbard? It has a very detailed breakdown of the components of the money supply over the 1921-1929 period at six month intervals. Regards, Don