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To: TimbaBear who wrote (15035)	8/2/2002 9:02:35 PM
From: Joan Osland Graffius	Read Replies (2) \| Respond to of 78507

TimbaBear, Thanks for the work on DELL. Maybe I am missing something in your analysis as it is my understanding that DELL has sold puts and will have to buy their stock back in future years at much higher prices because of these transactions. Are they going to buy these back at much higher prices and offer them as options at lower prices. Joan

To: TimbaBear who wrote (15035)	8/3/2002 1:35:59 AM
From: James Clarke	Read Replies (1) \| Respond to of 78507

Thanks Timba - great work. Especially the end. I agree with you that simply expensing options under some sweetheart formula is not the answer. My creative alternative is for the SEC to simply ban stock related compensation for two years - call it a moratorium until the market sorts things out. I like your suggestions too - very thoughtful and like nothing I've read elsewhere.

To: TimbaBear who wrote (15035)	8/16/2002 11:40:08 PM
From: mepci	Read Replies (1) \| Respond to of 78507

TB: Good analysis. I hope you have read my posts on Dell board which covered the subject extensively. The first mistake is for GAPP to allow the company to play with SE(shareholders equity). Employee compensation should go into three categories under expenses: 1. Short term: wages 2. Annual: bonuses. 3. multi-year: stock option trust. 4. Retirement: Pension trust. We have some guidelines for everything except stock options. Management should not touch SE, except a 2/3 majority vote by shareholders. shareholders can allow % of retained earnings to be moved to option trust. Shareholders need to vote on formulae for determining the distribution of options among employees, so that senior management is not a lopsided beneficiary. Treasury stock was misused by modern management. Treasury stock should be used only to retire stock for reverse dilution. Actually I don't like a company buying back its stock, unless there is an improved investment strategy. To me a management buying its stock indicates either foul play or incapability use their cash properly. Finally risk management and actuarial calculations should be used in managing option trust. I will go one step further. The board should be completely independent and handle the allocation and even management of employees trusts and bonus distribution. CFO should be an employee of the board. Comptroller can handle the money management for operations. It is amazing how these professionals claim ignorance in understanding fiduciary responsibilities. Unfortunately Dell shareholders will keep this stock in the 50 p/e ratio, even without counting the losses due to option plans. Good Luck.