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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (172877)	2/6/2003 4:38:04 PM
From: Road Walker	Read Replies (3) \| Respond to of 186894

My thoughts on the Intel stock option grants. Some folks suggested that Carl is upset because the stock is down, and there is probably some truth to that. It INTC were at $100 per share, I don't think anyone would be complaining. But to me, that is one of the issues. There seems to be a disconnect between the performance of these executives as reflected in the stock performance, and the options compensation. And I know that some of these options don't vest completely for five years, that these guys are getting option grants based on future performance. Still, it seems outrageous to be rewarding these folks in a very grand manner when the owners of the company are suffering great losses. This fall: Vadasz received options 313,825 shares, now owns options on 2.1 million shares. He runs Intel Capital, how much money did they lose in the last year? Maloney received options on 529,707 shares, now owns options on 2.7 million shares. Runs Intel communications group, a cash drain. Splinter received 528,852 for a total of 3.77 million shares. VP of global sales, last I looked, sales were about flat. My two problems with these, and with the options compensation for the real top executives. First, they seem way too high. These guys may be great, even phenomenal managers, but they are not Rock Stars. They are not going it alone, there are 1000's of employees supporting their work. Some of their work may be creative, but most of it is implementation. And implementors shouldn't get compensated like founders or creators. Second, their compensation should be tied to their performance. And frankly, I don't think options are the way to do that. Maloney can run the communications group into the ground, and if the IAG does great and the stock goes to $50, where he cashes out, he will receive $135,000,000. from his current options. (EDIT: To put that in perspective, Maloney alone would receive 13.5% of Intel's total earnings last quarter). I'm old fashioned. Pay these guys on a percentage of the gross profit they generate, after the fact. Let them get rich, but not obscenely rich, on the owners profits. If they want to gamble on their own performance, let them do it with their own money. They can buy at the money Jan '05 leap calls today for $4.75. John

To: GVTucker who wrote (172877)	2/6/2003 4:42:32 PM
From: Tenchusatsu	Read Replies (2) \| Respond to of 186894

GV, my statement was partially made in jest in response to Carl, who in my "humble" opinion made a rather ridiculous statement. Of course I don't believe the Naz would fall by 50% if stock options were expensed. The point I was making is the same one that others have already made. This is an industry-wide problem, not an Intel-specific problem. Tenchusatsu

To: GVTucker who wrote (172877)	2/7/2003 8:25:24 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

Hi GV, RE: "It is silly to have a policy that produces inaccurate financial statements. Stock options should be expensed because financial statements are designed to provide an accurate picture of the financial status of a company." Expensing options does not provide an accurate picture. It would provide a grossly distorted picture. Message 18537262 "Dennis Powell, Cisco's controller, said the company continues to believe stock options shouldn't be expensed, because they can't be fairly valued. For example, the options Cisco granted for the fiscal year ended July 2001 were valued at $3.3 billion. Today, using the same statistical model, those options would be valued at $131 million, because Cisco's stock price has dropped precipitously, Mr. Powell said." From my other post, if a public company is heavy on options but light on base, they save a lot of money that may be plowed into RND, esp important during hard times, yet reward for performance when it is most cost effective to do so. But if they are charged for this, they may start turning their comp plans into a plan that's more appropriate for the slower growing dividend-based companies, the lower growth style comp plans, as well as change the overall comp structure (of how many & who gets options.) RE: "Changing the rules ... won't change the operations of a company." I (respectfully) disagree. It would. Btw, last I checked, expensing options wasn't close to making it through any Congress initiative (there were a lot of proposals). Has something changed recently? Regards, Amy J

To: GVTucker who wrote (172877)	2/7/2003 12:26:35 PM
From: carl a. mehr	Respond to of 186894

It is silly to have a policy that produces inaccurate financial statements. Why should I have to pore through the proxy statement to find a compensation cost? No reason. Stock options should be expensed because financial statements are designed to provide an accurate picture of the financial status of a company. AMEN!...humble carl