Carl, RE: "I believe that Paul Engel have seen the light!"
You're incorrectly representing Paul Engel's opinion.
Paul said he doesn't understand why anyone would have an issue with Intel's practices, as they are quite "above-board."
You obviously have a different opinion and you are entitled to your opinion, but if you could try not to misstate another person's opinion.
Frankly Carl, I don't think either you or I could recognize the bottom of a bear market, nor the top of a bull market. (And I am certainly guilty of that too, I just think it's illogical to accuse fraud on executives due to a bear market.)
You say you'd like to see the earnings charged by options, yet, you haven't thought through nor offered an opinion on how to reconcile, for example, a $3B option charge (that by way of example, Cisco had last year, that they no longer have today, because the value is now $130m). You have not offered any suggestion on how to present a clear operational picture, one that would not get convoluted by dumping stock stuff into the financial statements - it would obscure operational clarity. Have you ever driven decisions by looking at financial statements? It's incredibly useful if these are clear and not distorted by distorted costs.
I do see a lot of validity in John Fowler's logical post, about the question, why was there a doubling up on the # of shares for the top-most when their performance (as measured by the stock) didn't perform.
However, I looked at John's earlier post again, "the company's directors, chairman, chief executive and president did not receive any options."
I guess all of us missed that part. Oops.
Though I still think they should have used a hyperbola or logarithmic formula that tappered off to an asymptote rather than fully rewarding the second layer of the next five executives for a declining stock price and apply this aymptotic hyperbola to any refresh, including the annual grants, not just the refreshes. I think 400,000 shares in 2001 was a bit excessive too if one considers the stock isn't stuck forever - SIA's estimates of 20% & 22% growth translates to $45/share in two years assuming no change in fixed costs.
I think Intel's comp committee needs to understand that shareholder perception (at least mine, yours, and others on the thread) of the "top" includes the second layer of the next five(?) executives, not just the top 3. So, on that, we are in agreement on that item.
But financially, I don't see the approx $50m grant values that were awarded, as a big deal from a financial perspective, but I see it as a huge sensitivity issue for us investors, and probably for the employees too which means it becomes an investor issue. A good exec should be aware of the image they present to the public, and doubling up on the # of shares because of a declining price just doesn't present a good public image, only because the amount is huge, thus visible, at odds with investors, almost conveys an incentive for the stock to drop 50%.
RE: your other post about being disturbed that I value antitrust prevention by Dunlap
The law is above any company and any individual. I strongly, strongly believe this.
So, I value anyone that understands this with razor sharp clarity, and whom also protects their company & shareholders by actively enforcing their internal antitrust procedures to the fullest, to ensure obedience to the laws that govern this country.
What's more ethical: hurting the brandname/company, demoralizing other depts, embarrassing former employees, & hurting shareholders, by not being sufficiently aggressive enough to proactively ensure there isn't a renegade program manager doing something wrong that could get a company into anti-trust problems?
Edit: Just saw Watsonyouth's post about how he received no options from IBM for 20 years of service. Wow, IBM not giving an engineer options?
Regards,
Amy J |
