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

To: hueyone who wrote (239)	8/20/2002 8:22:23 PM
From: jt101	Read Replies (2) \| Respond to of 786

hueyone, Thanks for your kind words. Interesting comments from Bill Gates. BTW, I always feel, expensing options will be a bless in disguise for established companies like CSCO / INTC / MSFT to thwart competition from startups. BWDIK... Gates: Expensing Options Won't Hurt Techs August 20, 2002 6:42:00 PM ET By Jeffrey Hodgson TORONTO (Reuters) - Microsoft Corp. (MSFT) Chairman Bill Gates said on Tuesday there would be little impact on technological innovation if hi-tech firms began accounting for employee stock options as an expense. But Gates, co-founder of the world's largest software maker and one of the world's richest men, reiterated Microsoft's stance that it has no plans to join the growing ranks of companies that have begun expensing options in a bid to improve investor confidence. ``I don't think a change in the way the accounts are done would have some major impact on technology. The numbers are there in every quarterly report. There's full disclosure. So it's hard to think: would that make some dramatic change in behavior?'' Gates told a news conference in Toronto. ``We'll have to see if that comes to pass. But I'm not predicting some dramatic effect one way or another.'' Scrutiny over corporate treatment of stock options has intensified after accounting scandals at Enron Corp. and WorldCom Inc. (WCOEQ). In the past two months, General Electric Co. (GE), Amazon.com Inc. (AMZN) and Coca-Cola Co. (KO) have agreed to expense options in a bid to regain investor confidence. But the technology sector, which has traditionally doled out stock options to attract talent, has resisted the trend. Some industry watchers have said small tech companies in particular could see their bottom lines pushed deep into the red by the policy. In its latest earnings statement, Microsoft said fourth quarter net income would have been $903 million instead of $1.53 billion if it had to expense stock options. Microsoft said last month it would stick with the tech sector's practice of not listing employee options. ``There is no change in the accounting standards related to stock options,'' Gates said on Tuesday. ``Obviously our industry should move in a consistent way, because otherwise you're not going to get any comparability between results. So we'll see what the industry chooses to do or what the requirements are.'' Gates was in Toronto for a Microsoft-sponsored conference on innovation after spending three days in Montreal playing in the World Bridge Championships. He told a conference audience the collapse of the dot-com bubble had a positive side effect for his company. ``I'd say we're in the most positive hiring environment that we have ever been in. I mean it's wild. We get so many good people now,'' he said in an on-stage interview. ``As the dot-com era came, people said 'if I haven't made $10 million in my first few months, I'm going to a new company'.'' Microsoft announced in July it plans to add 5,000 employees to its workforce of 50,500 for the current fiscal year that ends in June 2003. © 2002 Reuters news.moneycentral.msn.com

To: hueyone who wrote (239)	8/22/2002 10:40:30 PM
From: TimbaBear	Read Replies (1) \| Respond to of 786

Hello all! I was informed of this thread on another that I visit. I first want to say that I've enjoyed reading the last 80 posts and if any of the regulars here think there is a post prior to that that I should read, please bring it to my attention. I want to state that I am in favor of expensing all expenses related to doing business. I am also in favor of enforcing the fiduciary responsibility that all managers and directors of publicly traded companies have to the owners of those companies....the shareholders. The positions they hold are a public trust. The responsibility is clear....maximize shareholder return. The violation of that trust is epidemic. The prosecution of that violation is almost non-existent. I have not seen one person charged with violation of fiduciary responsibility. After all this hoopla....not one. The FASB is a joke! They couldn't work their way out of a wet paperbag with instructions and a knife! I say the argument is focusing on the wrong ball. It isn't the cost of the option that should be expensed, it the cost of the exercise. How about this set of changes: 1). Force companies to not dilute shares due to stock options exercises. 2). The cost of buying shares to prevent dilution should be the HIGHER of a). the actual cost to buy them; b). the fair market price of the shares on the day of exercise; or c). the cost of buying them if they are taken from treasury. 3). Limit the amount of profit that can be taken by insiders to 20% of CFO or Net Income or taxable income whichever is less. 4). Some kind of regulation prohibiting practices which would delay a company from exercising options in one year to claim them in another year. (The idea of this is to try to prevent manipulation of the exercise recognition). Expensing the options at grant is building in more complexity than needed and, maybe, thereby preventing change from ever occurring. Timba