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To: DuckTapeSunroof who wrote (383893)	4/1/2003 10:17:48 PM
From: Techplayer	Read Replies (2) \| Respond to of 769670

Buddy, I deal with hundreds of companies. Not one of them in the past 13 years has offered in the money options. I will say that my data is purely within the tech sector. Unless the price of that stock rises, there is no value in the assigned option and therefore to the employee. I look at LU as an example. LU gave all of its' executives large sums of stock grants as part of a package. Those grants became an excuse to not get fired rather than fuel to inspire excellence. An option at market price is a carrot for performance, individually and company wide. I believe that we are saying the exact same thing here: "Now, if a company NEEDS an employee to stay on board, grants are certainly a better tool." >>> Why? The available evidence seems to show that stock better aligns an employee's interest with the company's long-term growth than options - which can be walked away from if they are under-water, and there is far less incentive for upper management to cook the books for a short-term options cash-out.

To: DuckTapeSunroof who wrote (383893)	4/1/2003 10:23:05 PM
From: Kevin Rose	Read Replies (1) \| Respond to of 769670

Not quite. Most options are granted using the current value of the stock. If they aren't, then typically the difference is counted as ordinary income for that tax year. Otherwise, company A could grant stock in lieu of salary and circumvent normal tax treatment. ISOs (a variety of stock option) can be granted at down to 85% of the current stock value (at least it was that way a number of years ago). There is a limit to the amount of ISO stock a company can issue options for. Options are proven motivators and can result in huge productivity gains, if used properly. Obscene grants to top executives are generally not as productive as spreading grants to the people who actually do work.