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Strategies & Market Trends : Option Granting Practices and exploits -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (39)	9/10/2006 1:41:46 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 165

hi Glenn I agree with the interviews of valley people you bolded in your article that this is surreal to many of us here. This backdating was STANDARD OPERATING PROCEDURE, signed off by accountants at almost every company. What I think is at issue is that when company X hires a new CEO and backdates his options to last quarter, you are supposed to REFILE your last quarters financials, which nobody ever did. Since options were used to deduct against tax payments, the reality is that refiling for backdated options grants probably results in companies paying LESS taxes than before. And since these things weren't expensed, the tax hit is the only hit. The DOJ can put everybody in jail over this if they want, but everybody did it and it was signed off. Thats why companies like Apple who have admitted to this practice have stocks that are rallying because the street knows this is something of a non event. Here's what I think about this from the DOJs perspective. In this decade, unlike last, we have a bifurcated economy which is actually quite horrible if you ask me. Literally EVERY worker including the most highly skilled engineers are under SEVERE wage pressure. This is due to offshoring of service jobs which is literally our entire economy at this point. We offshored manufacturing away 3 decades ago but still had the IP jobs, no more. The US worker is suffering dearly. Meanwhile, corporate profitability is at an ALL TIME HIGH. Its a gross bifurcation. The DOJs REAL AGENDA is to get CEO and "insider" pay aligned with the country. CEO pay has actually INCREASED since the bubble, where even then is was gross in terms of excess to even more ABSURDLY EXCESSIVE levels. The vehicle for CEO pay excess is a "clubby" board room structure, and stock options. The FED is trying to push for disclosure of stock options and this backdating scandal is just something they made up to do it with. That is my opinion. I am all for it actually, except that I don't think anybody should go to jail over stock options. Just require more transparency in the future and outline the CEO pay structure in the annual report IN DOLLARS and make it clear. Thats what I think is necessary here, lest the USA fall into the trap of becoming another Latin America with all the wealth at the top. I should say that there are many positions in these companies like CFO that I think are seriously overcompensated everywhere, at every company. The reality is that many CFO functions can be offshored and should be. Even the CFO himself could be offshored, but never is due the clubby aspect of the board room. PS Steve Jobs deserves every cent he is paid