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Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Jack Hartmann who wrote (2811)	2/28/2003 1:04:22 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 2882

ADI CEO Gained $5.9M From Stock Options In '02 DOW JONES NEWSWIRES WASHINGTON -- Analog Devices Inc. (ADI) President and Chief Executive Jerald Fishman realized about $5.9 million from exercising options in fiscal 2002, which ended Jan. 29, according to proxy materials filed Friday with the Securities and Exchange Commission. Fishman and the company's other executives didn't receive annual incentive bonuses in fiscal 2002 as the company said it terminated its bonus plan in November 2001 due to business conditions. However, Analog Devices said it "restored" annual base salaries to its 2,500 most highly compensated employees. Fishman's annual base salary was restored to $930,900 from $791,300 in fiscal 2002. In fiscal 2001, Fishman received a bonus of $317,600 and a base salary of $860,100. Also in fiscal 2002, Fishman was granted one million options to purchase common stock, and received one grant of 530,000 options at an exercise price of $41.05 a share. Assuming a 10% annual stock price increase, the grant is valued at $34.7 million, according to the filing. The other grant is for 500,000 options with an exercise price of $19.89 a share. Assuming a 10% annual stock price increase, the grant is valued at $15.8 million. At the end of the year, Fishman had 545,000 exercisable options remaining, valued at $11.1 million. Shares of Analog Devices recently traded at $23.22, up 18 cents, or 0.8%. According to Analog Devices' proxy statement, a union has submitted a proposal to establish a policy of expensing all future stock options in the company's annual income statement. The United Brotherhood of Carpenters and Joiners of America, which beneficially owns 1,600 company shares, said that expensing stock options would more accurately reflect the company's operational earnings. The shareholder group said the lack of option expensing can promote excessive use of options, understate the cost of executive compensation and promote short-term stock price rather than long-term corporate value, according to the filing. Analog Devices said it recommends shareholders vote against the proposal. The company said it would be premature for it to change its method of accounting for stock options until the issue is resolved by new accounting standards. It said it currently is in compliance with generally accepted accounting principles. The company also said that most of its primary competitors don't recognize expense for stock options in their income statements, and if Analog Devices did so it will be difficult to compare results. Analog said it discloses the pro forma effect of options on its income statement of recognizing the "fair value" of options as determined through the use of the Black-Scholes option-pricing model. Black-Scholes model is used to calculate the value of an option by considering various factors, including the stock price and the expiration date. Shareholders will vote on this proposal at the company's annual meeting to be held March 11.