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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (126003)	12/12/2002 7:36:15 PM
From: Jim Mullens	Read Replies (4) \| Respond to of 152472

Much-, you responded->> 1. “sure they can! just pay them $1 million a year instead of $125K. then you don't have to give them any options. “ 2. “the point is, when a co hires somebody, that employee is supposed to make a good-faith effort to perform the job requirements according to the job description, REGARDLESS of the salary. failure to do so may be grounds for termination. “ 3. “so the "other side" of the options expense that you want so badly to put in the assets column is just an employee doing his job. which he would do without any options if you gave him enough cash. “ My response- Mucho, you’re wrong, wrong, wrong, on all three points (IMO). 1. A start-up company (in my example) does not have the resources at that time to pay these highly/ specially qualified /and in short supply scientists/ engineers $1M bucks per year (which they’re really worth when pooled together to develop this revolutionary new technology). That’s why they offer them compensation in the form of options. 2. A company has no right to demand permanent employment from any person. That’s considered slavery and I thought that went out of fashion sometime back. Options vesting at a much later date which require actual employment thru that date provide part of the incentive for an employee to continue employment with that company (to receive the riches at the end of the rainbow). 3. The other part of the incentive is to reward the employee with a percentage share of the ownership of the company at some later date. No company can force a person to work harder than the next guy, but if that person believes that his extra efforts along with the extra efforts of his contemporaries working together to develop this revolutionary new technology will someday reward them extraordinarily, their work will be extraordinary. 4. Your statement ” just an employee doing his job, which he would do without any options …” does not apply. This company cannot succeed with ordinary workers doing ordinary work. It requires extraordinary workers doing extraordinary work which it cannot pay up front for that performance. Thus, it uses options as a means to accomplish its goals. The outside investors know these are extraordinary folks getting these options and accept the fact that their share of the ownership of the company will be reduced, but these investors also realize that the ultimate value of the company will be extraordinary and they will be rewarded extraordinarily as well. Both the employees and the investors of this company are of the belief that it will become a truly extraordinary company and will someday receive many awards of recognition for such. Perhaps it will become for several years running in the top ten of the hundred best companies to work for in the U.S.A. 5. This is why I stated in my prior post- “ I would think for the sake of consistency, if one assigns a value to one side of the transaction a value should also be assigned to the other side of the transaction. “ Accountants like consistency you know. Mucho, if you are so dead set on assigning (estimating) “economic value” where you believe in has not been properly accounted for the benefit of the shareholders so as to create an additional expense item on the income statement, why not also take up the fight on the behalf of the shareholders to assign “economic value” to patent rights as well. Surely, you believe they are of some worth that has not been registered on the balance sheet. Thanks for your time- Jim