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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (47702)	2/1/2001 11:14:05 AM
From: Dennis Doubleday	Read Replies (3) \| Respond to of 77400

Phoenix wrote: Bottom line is that options are worthless unless the company executes... if they do everyone wins... if they don't no one wins. To take the analogy of the race car driver... maybe he's just naturally good... so does that mean that he shouldn't enjoy the windfall from his success? Options are a way to share a companies success with their employee's. It's really quite simple. No success - no sharing. -------- True, except that companies routinely violate this precept (especially for top management) by removing all downside while leaving huge upside intact. Case in point, the story we just saw about the SEC forcing companies to disclose the fact that they have allowed executives to undo their exercise of ISOs after it has become apparent that exercising and holding was not a good idea. Also, executives are routinely given option grants that are so large that the executives can reap tens, or even hundreds, of millions if the stock simply rises, say 25%, over the course of the 10 year exercise period. Hardly good performance, but the compensation is stratospheric. The problem is that executives sit on each other's boards and reward themselves (with large option grants to board members also greasing the wheels.)