Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Big Picture - Economics and Investing -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (647)	11/3/2000 10:33:12 AM
From: Arik T.G.	Read Replies (1) \| Respond to of 686

>>[stock options]...boil down to being competitive in the labor markets to succeed in recruitment and retention. >>Both salary expenses and stock dilution are real costs to shareholders So had the company saved the money or paid dividend instead of buying back its shares, or if the company increased the salaries paid and did not hand out stock options, then shareholders would have been hurt by dilution, or by lower earnings. But if the company buys back its shares to compensate for employees' options, this is an "investment" and shareholders are not hurt? Don't get it. Looks to me the $1.5B spent on keeping the number of shares from rising is some kind of expense, or from the other POV- stock options should be calculated into the wages paid by the company. Look at the simple economic value of the stock options by assessing how much would the company have to increase salaries without them. Then you'll find that the company is not making money because "real" wage expenses are much higher then the reported ones, and it doesn't matter if the company is buying back stock or not but the buyback amount is the easiest way to put a price tag on the dilution. ATG