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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: EnricoPalazzo who wrote (52111)	7/16/2002 1:23:28 PM
From: slacker711	Read Replies (1) \| Respond to of 54805

Can't they do the same thing with cash bonuses today? They can....and I'm sure they do. The difference is that I dont think that most people get cash bonuses equivalent to their option grants (as your MSFT example also showed). Also, I think that employees value options differently. If you cut somebody's cash bonus in half vs. cutting their option grant in half, I think they will be far more upset about the cash. Of course, you should probably take my opinions with a grain of salt since I havent worked at a place that gave options. These are just my second hand observations.... If the market begins valuing companies based on earnings that include options expense, I think you will see a dramatic curtailing of options grants. I actually think that this would probably be a good thing. Options are a great way to tie the employee to a company (and also give the employee a personal stake in the company doing well) but I think companies may have gone overboard in the number of options that they have granted. Just looking at the Cisco numbers from the Barron's article....a $1.5 Billion dollar drop due to the change in accounting. This works out to about $42,000 for each of Cisco's 36,000 employees. Slacker