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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: KHS who wrote (1542)	7/6/2002 11:28:26 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

KHMan, not an issue of clean books, but I hear you I refer to an entirely new exposed public corp "legal" gutting it involves massive senior mgmt stock options it involves massive commercial loans to buyback stocks for instance, Maxim Integrated Products spent about half as much on CEO stock options as it earned in profits IBM might have spent a similar amount on stock buybacks with cashflow or commercial paper this is not an issue of clean books do you know what I mean? in MXIM's case, they are trying to keep the stock up for the implied purpose of cashing in on mgmt stock options I hear that MXIM senior mgmt owns zero stock anymore the whole game is indirect compensation rape they exhaust valuable capital that should be directed toward R&D, toward new plant, toward replacement of obsolete equipment, toward marketing of products, for training of staff in the end, the MXIM (or other firm) will have poor future business prospects since their competitors will have beaten them in the business field of battle the lifeblood has been absconded with, so as to keep equity prices lofty in MXIM's case, the P/S ratio is silly high everything is silly high, except investment in their own company and we dont even receive details on the amounts spent on such options we only hear of the diluted number of shares one must use options models to reverse engineer the money diverted to finance lucrative and absurd stock option plans I remember at Staples from 1995-2000, I received puney stock options of 1000 shares per year my manager received options for 2500 shares per year VP's received 10,000 shares per year but nobody really knew about the top group VP's nor about the Board of Directors that was considered confidential we would hear occasionally about the CEO selling several million shares where they came from, nobody knew if you subtracted from one year to the next, you could determine the new shares minted for the benefit of the top VP's when the CEO is the founder, few question Lou Gerstner used legal means to pilfer $40-60 million per year in a self-designed compensation package I doubt shareholders wouldve approved anything more than $3-5M/yr in official salary shareholder interests are NOT aligned with senior mgmt's senior mgmt has nothing to lose, with known strike price they control the funds and resource allocation they can even take ridiculous risks in pursuit of realizing fat option redemptions and exercises I think many in recent years have been outright redemption sales does this make sense? do we know what Chambers spent on option packages and share buybacks using Cisco money? or Ellison using Oracle money? or Gates/ Baldheadmer using Microsoft money? or Groves/ Barrett using Intel money? or good guys like Siebel using Siebel money? do you even know what your own company's senior mgmt stock options are in number of shares? I suspect not they say "none of your business" hmmm, really??? whose business is it? what do you think? / jim