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To: Don Lloyd who wrote (173039)	6/16/2002 12:16:02 AM
From: LLCF	Respond to of 436258

<However, expensing options is always a form of double counting the negative impact on shareholders of dilution.> As I've stated before, there is ALWAYS accounts that can be formed that cancel each other out [and hence the double counting] and still rearrange accounts to show the expense as an operating one. I fail to see why this is so hard to understand? dAK

To: Don Lloyd who wrote (173039)	6/16/2002 1:22:21 AM
From: KeepItSimple	Read Replies (1) \| Respond to of 436258

You are a fucking nutcase. Why are you wasting that much energy to defend public company fat-cats? Look, the bottom line is that execs at high tech companies have been raping shareholders for years by hiding the cost of options in footnotes, by buying back shares, or just hoping nobody would notice the number of outstanding shares tick up. Until recently, the shareholders didn't even know it was happening. THE NEW LEGISLATION WILL MAKE IT PLAIN AS DAY HOW BADLY SHAREHOLDERS ARE BEING SCREWED. By not expensing options, companies can hide this assfucking of the shareholders. Look, the game is up. Clearly you are one of the afore-mentioned execs and are just trying to save your skin. Your argument holds about as much water as Arthur Andersen saying they didn't intend to shred tons of documents to hide evidence, but rather they were just practicing their document retention policy at a coincidental time. ---------------------------- There is no way to say in general whether option grant compensation helps or hurts shareholders, as the terms could be extreme in either direction. Plus there is no way to predict the price of the stock and how valuable the retained employees actually are. However, expensing options is always a form of double counting the negative impact on shareholders of dilution.

To: Don Lloyd who wrote (173039)	6/16/2002 2:08:53 AM
From: mishedlo	Read Replies (1) \| Respond to of 436258

Don, Let me try again. Comments from all are welcome. ======================================================= Lets assume (tax differences aside) One company pays it employees in options another in cash. Shouldn't the effect on earnings be the same. If that company has income of $1M (with 100% profit, no cost at all for that income, a perfect fabless company with no expenses other than salaries and 100% bottom line profit margins on all income) and pays out $1M in salaries, it has $0 in earnings, correct? Now that company pays out $1M in options and reports to the press, $1M in "earnings" even though shareholder equity HAS to drop by $1M (cause they had to give up $1M in stock to pay that employee). Assuming options are immediately redeamable isn't this correct? Yet in the options scenario, the "earnings" that the company reports are $1M, even though the company has $1M less in stock that it had before and thus $1M less in assets, $1M less in shareholder equity, and thus really had ZERO earnings. Isn't this correct? If this is correct, then how the Hell can companies overstate earnings by the current value of those stock options every frigging quarter? I believe every company should fully pay employess in immediately redeamable options (always such that employees geat a fixed amt of income, based on current share price). Then companies can not only take tax benefits, but have greater "earnings" as well. What a scam. M