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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Night Trader who wrote (30774)	2/18/2002 5:37:06 PM
From: Boca_PETE	Respond to of 99280

martin knight - When you re-read my post, you will see that I actually said " Company B deserves a higher valuation because it was clever enough to get its shareholders to directly pay the stock option portion of its executive compensation. The different economics (ie. cash flows) of company A vs. company B deserve different accounting." The above is a lot different than saying "deserved a higher valuation because its management was more clever in its accountancy" which implies management is doing something without economic substance. Perhaps I should have used the positive word "estute" or "savvy". IMHO that's the kind of management shareholders ideally seek in a company they invest in. Your comments focus on an overall market impact of dilution from stock options. Individual companies grant stock option, not the stock market as a whole. In the real world, individual companies differ in their compensation policies and it is up to the individual investor and the analyst community to sort out the good and the bad. I could not tell you how many people do this kind of homework before buying and selling stocks. In the company I worked for and many others, the variable portion of one's compensation package (including stock options) varied inversely to the importance of the executive management position. Employees below a certain pay grade received no stock option grants, but part of their pay was company stock received in varying amounts depending upon how the company performed that year relative to competition for various banchmarks and how they performed relative to internally set goals. Some of this information is disclosed in the annual proxy material filed with the SEC. Therein are the tables analyzing the components of executive compensation of the top officers of companies and all officers as a group. There's nothing one can do about an average dilution impact from granted stock options related to the overall market, but there is something one can do related to the relative dilution from granted stock options of individual companies - buy, sell, hold or pass. P