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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (858)	5/26/1998 2:39:00 PM
From: Bilow	Read Replies (1) \| Respond to of 2578

Hi David Stern; The subjects of options as pay for employees and buy backs in lieu of dividends are distinct. That the buy backs are more efficient than dividends, there is no doubt, particularly when the market does not place a premium on dividends. On the other hand, it is impossible to reasonably argue that companies shouldn't expense the cost of paying employees with options. Taken to its logical conclusion, a company could eliminate all its labor costs by simply replacing everybody's pay with stock options. Hmmm. I suppose you'd have a problem that employees would be unable to predict their income. This could be eliminated by simply giving them very short term options (i.e. 1-day), which have to be exercised or left to expire each day. A simple accounting package will keep track of whether the employees have received more or less than the intended pay rate, and the option amounts for the next day could be accordingly adjusted. Or give the employees put options as well as calls... For this sort of pay to not be included in the labor expense of a company is directly contrary to generally accepted accounting principles. But when the GAAP people tried to get high tech to expense options on the income statement, high tech squealed to the US government, which basically told GAAP what to do. And we complain about the accounting practices of SEA companies... -- Carl