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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (65455)	5/13/2004 11:32:14 AM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 77400

the alternative option proposal that they are floating will expense the top 5 executive options and nobody elses, using black scholes. This is ok with me, except that I think it needs to be the top 10 or 15 officers. This will get the real abuse while not affecting the engineers in the labs. If the CEO gets fewer options because his are expensed, the lieutenants are not going to get the same levels either. Cisco only grants 4% of their total options pie to the top 5 executives but many companies are hugely generous with their executives while employees get nothing. Maybe agilent is like that. I have some acquaintances at HP labs and they are ready to skewer Carly at the next tribal council, what a pall that woman has cast upon our industry.

To: Kirk © who wrote (65455)	5/13/2004 11:38:15 AM
From: rkral	Read Replies (1) \| Respond to of 77400

OT .. Kirk, re "I'm not exactly sure how they accounted for it, but I believe those "mathcing shares" could have been expensed as they were issued at the fair market value and nobody would object. " Congrats on having the opportunity to get 50% value increase by just participating. I'm sure the "matching shares" were expensed. I'm also sure they caused dilution .. just like employee stock options. So, if the scale of the programs were equivalent, your cash-for-stock-repurchase versus cash-for-dividends argument would apply there as well. My original interjection to your post was just to point out that elimination of an employee stock options program would result in an increase in cash compensation -- not on a dollar-for-dollar basis -- not equivalently for all companies -- not equivalently to all employees -- not demandable in any economic cycle -- but some increase overall. Best, Ron

To: Kirk © who wrote (65455)	5/13/2004 1:43:45 PM
From: RetiredNow	Respond to of 77400

Hi Kirk, the thing is that Cisco is somewhat different than HP. Cisco gives out buku shares to the rank and file as well. That means everyone has a chance to do very well if the stock goes up. So when Chambers talks about impact to Cisco of expensing options, he's not exagerating. Every employee would lose out on a great opportunity. The real question is whether Cisco wants to continue compensating employees in a way that ties Cisco's performance to employee compensation. They can continue to do that with cash or evey restricted stock allocations, but they know that these require expensing, which will uncover the true, very large cost of this type of compensation alignment. Shareholders may rebel if they saw how much options were really costing them. Either way, I truly believe that once the expense one time charge is taken and options dilution is curtailed, Cisco stock can start to take off again. Until that time, they'll always have a large options overhang to slow the stock price's growth down.