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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: hueyone who wrote (130123)	7/11/2003 9:12:13 AM
From: Art Bechhoefer	Respond to of 152472

hueyone--We should have had this discussion after the public television news (Lehrer Report) last night, which discussed this very issue of expensing options. The discussion included none other than Merton, the Nobel laureate who helped develop the Black Scholes formula. I would certainly go along with the 1993 FASB proposal, but I would also note, as I have in earlier responses on this or the moderated thread, that options and/or the provision of stock amounts to little more than employee compensation that is taxable at a lower rate than salary. The best fix in this case is to reduce corporate income taxes and tax capital gains as ordinary income, adjusted for inflation. One thing that impressed me from the Merton interview last night was the acknowledgement that one main reason for switching from options to stock on the part of Microsoft was that the employees saw too much risk in options. That says a lot; namely, that Microsoft earnings may no longer be capable of the kind of growth that occurred in the 1990's, and that employees are conservative enough not to want to take chances. Let's hope the prospects for QUALCOMM are better than this. Art