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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Fred Weiss who wrote (27733)	11/3/1997 2:25:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 58727

I'm quite sure many of these guys do juggle numbers... ...and I'm not referring to the "Fly By Night" Corporation, either. When I took a Series 7 some zillion years ago I seem to recall that shares re-purchased on the open market were retired and put into Treasury Stock. I don't know if this is correct or not...whether it is so or whether some shares are re-distributed to execs as options vs. new shares being created creates the same result. Perhaps there is a special program to re-purchase shares specifically for incentive plans, I dunno. The few companies I am aware of frown on executives dumping more than a reasonable amount of shares back into the market...I know of one example where an exec sold out his position upon exercise and, well, this is one reason he is working elsewhere (If he has a job, yet.) I, myself, have sold stock in companies because the board does not own appreciable amount of stock....a NJ utility, PEG (PSE&G) is an example, with Josh Weston (of ADP) and Dermot Dunfey (of Airco) the only outside directors that bought what I would consider to be a fair amount of stock. I think most companies should pay their directors 50% of their money in stock.....give 'em an interest in seeing the company do well. Anyway, the comapnies I am familiar with, use compensation committees to decide what the top exec(s) get. These committees (that I know of) are comprised of outside directors -- presumably to make the arrangement "arms-length". If there is disagreement as to the quality of compensation...an independant arbitrator is called in. To sum that up....I'm saying the CEO cannot just grab some guys and say "let's give ourselves some options." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ As far as the less informed individual is concerned, if s/he owns the stock it (the purchase of puts) may be for portfolio protection. If not, then it's probably for speculation. In either case both parties have a somewhat rational reason for being on the side of the trade that they are on. The company wants to retire the stock and the individual wants protection or is a speculator. If, indeed the puts are not exercised and the money ends up in the bank account....the company should still have in place a stated objective to re-patriate shares and one would presume that....barring the (presumably) rare discontinuation of such a program, they would continue to do so.