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To: L. Adam Latham who wrote (165463)	5/29/2002 12:59:37 AM
From: Ali Chen	Respond to of 186894

"to take on high-risk/high-reward projects." I think you are still missing the GVT point: they do not risk much with options, only their time is at risk. Therefore those projects also could be called as "reckless/fraudulent-reward projects". "they will discourage this behavior and slow the pace of innovation - something many lawyers and politicians simply can't comprehend." It is not quite clear whether an extremely high rate of innovation is an economically positive factor or not. Too high rate may lead to excessive waste of natural resources, which may be not sustainable and recoverable. Example - how many perfectly-working computers are wasted/trashed in senseless "upgrade" cycles, just to please stock option ambitions of audacious proponents of "Moore's law" sustainability? Just another possible viewpoint on the issue. - Ali

To: L. Adam Latham who wrote (165463)	5/29/2002 7:34:09 AM
From: GVTucker	Read Replies (2) \| Respond to of 186894

Adam, RE: Be it a mistake, oversight, or whatever, the current law regarding options provides an incentive for executives, managers and many mid-level engineers to take on high-risk/high-reward projects. If the government changes the law now, they will discourage this behavior and slow the pace of innovation - something many lawyers and politicians simply can't comprehend. I will grant that you have an arguable point, albeit one I disagree with. Isn't that always the way it will be with any uneven tax law? Real estate was in a very similar boat about fifteen years ago. The tax law was absurdly biased to provide an uneven benefit to many real estate development. The government changed the law to level the playing field, and in the process made many projects economically unfeasable. I don't think anyone lost sleep over Donald Trump losing a billion dollars, although in his defense he made the same point that you're making.