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To: Saturn V who wrote (174619)	5/15/2003 5:25:01 PM
From: hueyone	Respond to of 186894

I think what you meant was that if the company sells an option on the open-market. Then it buys an option on the market and then gives it to the employee. Now you claim that now it is a expense which should be charged to the earnings. I was trying to simply compare the company selling stock or stock options on the open market and using the cash proceeds to pay employees in cash versus taking those same shares or options and directly granting them to the employees. I was further noting that the two activities are really close economic equivalents, and in the first case, there is clearly both dilution and an expense on the income statement. With stock grants to employees, there is also both dilution and an expense on the income statement. The only form of employee equity compensation that escapes an expense on the income statement afaik is stock options. That is why stock options are so much more popular with management than stock grants. Regards, Huey