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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (82988)	8/15/2000 4:37:07 PM
From: Freedom Fighter	Respond to of 132070

Don, I agree with you completely in a theoretical sense. There are certainly times when granting options instead of giving cash is in the best interests of the company. One case might be when the stock is massively overvalued and the company has no intention of repricing them. (good chance they will expire worthless) Now, I think in some cases we are just dealing with "bad intentions". The idea is to juice the EPS and produce a higher stock price (and not necessarily greater value) by substituting options for all sorts of expenses. That gives the options holders on the top of the pyramid a chance to cash out big time. I think there is a lot of ignorance among shareholders and employees that are accepting options instead of cash. However, the relentless bull (and repricing) is keeping the game alive. >>As a shareholder, the fact that you do not sell is effectively a vote of confidence in management to serve your interest. As a rational being, and considering that your share ownership is purely intended to earn financial rewards, you should not grant options unless that serves your interest as a shareholder. The granting of options is done in exchange for a perceived group of advantages that must outweigh the sacrifices made, else it is in error. All option programs are approved by the vote of the shareholders and are administered by a management and board of directors who ultimately serve at the pleasure of the shareholders, and in fact have many interests in common.<<