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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (25056)	10/19/2006 7:58:59 PM
From: Carl Worth	Read Replies (2) \| Respond to of 78705

there's no way that such things could or should be regulated...this is akin to the congressional nonsense about windfall taxes on energy companies simply because they had a few great years of profits...let's all be socialists and redistribute the wealth every few years...or we can go back to the carter years with 90% income taxes and no incentive for anyone to be an entrepreneur or take any risk...that sure worked out well <g> if you choose not to own stock in a particular company because it gives options to its management and/or employees, so be it, but it is irresponsible and impossible to try to determine an "acceptable" level for compensation some people here are saying options are okay for someone who takes a risk at starting with a fledgling company, by why are they then not also okay for someone who stays with an established company, out of loyalty, to help them compete with said fledgling companies? should we incentivize people to switch jobs more often, and thus slant the playing field away from big companies to small, even more than it often already is? you could never regulate this anyway, as how will you determine what is a small company vs. what is a big company? it's one thing to say that the backdating of options was deceitful, it clearly was...it's quite another thing to say that companies like YHOO or whoever, that issue options as part of their strategy to attract and keep intellectual talent, are somehow deceiving you or anyone else frankly, i remain convinced that the whole options accounting situation is a lot of BS...when a company such as YHOO issues these options, they don't have to go out and buy them in the open market...you can say they have value, and they do, but the value is due to the potential of the company to perform in the future, not to any current cost if the options are in the money in the future, the diluted earnings will reflect the "cost" of that option grant, in terms of lower diluted earnings...if the options expire worthless, there was never any cost to the company or to its shareholders, as there is no dilution all of this aside however, the point in reference to your post here is that no one should regulate how much profit a corporation can make, or how much of those profits it should be able to share with its management and employees...if you don't like the compensation parameters, don't buy the stock...it's as simple as that finally, notice that no one cares about option grants when companies are running on all cylinders, such as the current situation at GOOG...it only becomes an issue when things start to slow down, such as at DELL or YHOO, and people look to put the blame on someone...the latter two companies are not faltering due to option grants, they are faltering due to competition eating their lunch...stick with the leaders in a particular industry and i'm willing to bet you won't have to worry one iota about options compensation JMHO of course