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

To: GVTucker who wrote (177796)	5/6/2004 10:43:51 AM
From: NITT	Read Replies (2) \| Respond to of 186894

Ron, "re: You see, option pricing with the Black-Scholes formula is not "some value established by a bunch of gamblers", it is a three decade old formula that is tested and verified every day in the free market. It works." I believe your point is irrelevant since what should be important to a shareholder is the impact on EPS that an option may create, and not creating an expense that is not really an expense since the employees will pay for the stock if that value is above the grant price at the time of exercise... assuming they are still with the company. Valuing an option is useful for someone considering buying one, but not as useful to someone being granted one or to an existing shareholder of a company that grants options. Expensing options is all about stopping what many consider big abuses… “fat cats getting rich”. The problem is that you will take away the incentive value of employee options if companies have to cut options because they fear that investors will not understand the value of the options as it relates to motivating a work force. Companies that use options right will get swept up in this attempt to get the “fat cats”. I might accept an argument that an option program that is not spread out across the work force might have to expense… that force 401K participation to be balance in a certain way between “highly compensated” and other employees, maybe they do the same with stock option programs. Nitt