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To: Stock Farmer who wrote (29382)	3/2/2003 12:58:39 AM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

John, It seems to me that most of your erroneous conclusions stem from an unwarranted premise that it is either possible or desirable to accurately compare one unique company with another. Say one NY law firm pays its legal document couriers only 1/3rd as much as another because it employs only marathon runners in training who are willing to work for less because the company has superior showers and locker room facilities. Would you really adjust the compensation expenses of one company or another to make up for this difference? Invent a company whose total assets consist of only $10M in cash. The company business plan is to 100% liquidate over 10 years by paying out cash dividends to its 10 shareholders. There are no employees. If, for tax reasons, one of the shareholders turns in his shares in exchange for an annual salary equal to his dividend payment, the company will still liquidate in 10 years, and everyone will have exactly the same cash flow, but there will now be an employee and compensation to be accounted for. Reverse the order, so that an employee instead becomes a shareholder. There is no problem in either case as long as you don't make up a phantom expense that doesn't exist and keep track of the outstanding shares. Regards, Don