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.

Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (60)	6/16/2002 5:57:14 PM
From: hueyone	Read Replies (2) \| Respond to of 786

Hi Ron: Whereas this is not the case for the fair value method, it is possible to determine, e.g., for QCOM and SEBL, that the amortization schedules probably match the vesting schedules (6 years and 5 years, respectively) of their option plans. According to page 15 in the SEBL Proxy, (page 16 on the PFD side bar), Tom Siebel was granted employee stock options for 7,950,000 shares during fiscal 2001. Of this 7.95M option shares, 4.75M vest in five years at the rate of 5% per quarter, but 3.2M of the options vest in one year. The weighted average vesting period for Mr. Siebel for options granted in 2001 is 3.39 years. The weighted average veting period for all upper level execs listed in the Proxy for year 2001 is 4.09 years. The article referenced below notes that average vesting periods (for coporations in general) have recently declined from four to three years. e-insite.net We also know from research by Sanford and Bernstein that the value of stock option grants has expanded twelve fold since 1993. marketwatch.com So we have two dramatic trends aided and abetted by lack of accounting for stock options---shorter vesting periods and dramatic increases in the value of stock options granted. A positive connection between outside shareholders long term interests and granting of stock options to employees is getting tougher and tougher to find. Massive grants of stock options at short vesting periods simply transfer wealth from outside shareholders to insider/employee shareholders. Best, Huey