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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (174658)	5/20/2003 11:07:03 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 186894

Amy, I think you misunderstood that 'old post' of mine, because I regard the employees as the primary source of corporate innovation. Indeed, I believe strongly in employee ownership and incentives matching this. From a management perspective, I know well the difference between carrot and stick. Unlike some I know who beat their employees with carrots, or shield them with sticks, I prefer that an individual's actions should attract the appropriate natural consequences. And there are positive and negative consequences. One of which is wealth beyond imagination. Another is lack of employment. And a range of others in between. HOWEVER, employment is not as a primary outcome of business, but secondary to the point of business - which is the creation of wealth. If we set employment first, then we end up running a day-camp for over-privileged children, to which I am indeed philosophically opposed. I believe that it is morally wrong for employees to be taking away more "bonus" away from the business than in direct proportion to their ownership of the business. If they own the business then the can take away 100% of the wealth being created. Or 180% if they feel like it. For as long as they can. Sure, employees can take away more in "wages", that is a cost of doing business. But that should be counted as "wages" then, not as "bonus". And folks who are "investing" in enterprise where the cost of wages exceeds revenue... well, they deserve what they get. And either way, ("bonus" or "wages"), every dollar that an employee takes home at the end of the day is a dollar that the owners do not take home. As an employee I want stock options. I want as many of 'em as I can get my grubby mitts on. As an owner I want to give away as few dollars as I can in order to maximize the dollars coming in to me. If paying an extra dollar means I get $1.01 then I'll pay the dollar and be better off by the penny. But if paying an extra dollar means I get another $0.99 then that dollar stays in my pocket. It's an analog thing, not a binary thing. Furthermore, just because I can articulate a point of view on one side of the coin does not mean I do not appreciate the other side of the coin. I owe my enjoyable standard of living and current employment income to stock options. They are the greatest thing since sliced bread - both from a company and employee perspective. When used properly. And my posting is contextual. Usually in rebuttal to hyperbolic foolishness. Like how "profitable" Cisco has been. Or how "accounting" for stock options will ruin an entire industry. Mostly I am posting to SI as an investor, not as an employee. I am not employed by Intel or Cisco. So when I look at how Intel and Cisco explain how well they are doing making us (shareholders) wealthy, I do also wish they would also tell us how much it is costing us, in total. And I wish they would put in the proper cost of stock options, because it's a bloody pain in the ar$e to figure it out myself. And it also seems to be a farce the way Wall Street shills tumble all over themselves to explain how more or less profitable than each other these companies are when one of the biggest non-uniform component of wage-cost goes unreported. That's it, in a nutshell. As far as the relationship between use and accounting, I am fully aware of the relationship. REPORTING the cost of something does not change the cost. It merely increases the odds that people who don't understand the cost will fail to perceive it accurately. Which is the same basis behind fraud. People are saying that if stock options are to be expensed then it will "kill" American enterprise... amazing. As if being unprofitable is one thing, and being perceived as unprofitable is another thing. Which is technically true if and only if perception belies reality. Or in other words, only if somebody is lying! So where's the lie? Are stock options a cost, or not? John

To: Amy J who wrote (174658)	5/20/2003 7:26:01 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 186894

They're related. You perceive they aren't, but I perceive they are. In fact, one of the reasons why options aren't expensed is because some political body (forgot which one, Congress?) originally wanted to see ownership grow to become a competitive advantage for the USA, over foreign companies in foreign countries, which is the case at the moment. It was congress, although I don't know which house, that agreed with the tech industry last time around that options shouldn't be expensed for the reasons you cite. I think it is interesting that today, the spin is that the tech industry strongarmed congress into "looking the other way" on the options issue as a sort of pork project. No way to know what the real thinking was but personally I doubt it was purely a lobbying issue. I don't think it sits well in congress to have all these wealth generating companies turn from profits to losses. Congress doesn't want the US growth engine to shut down any more than your average unemployed worker. Hopefully this time, if the FASB gets derailed in some way wrt options, it won't be as easy to blame the big bad tech lobby. The tech lobby isn't as powerful anymore, so if options make it through without expensing, there will be other parties in favor of it.