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To: Mark Brophy who wrote (3419)	7/17/1998 1:35:00 AM
From: Pirah Naman	Respond to of 10309

Let's calculate the real cost of the stock options of the CFOs of ... Looking at individuals doesn't tell us much. Compensation varies within a company as well. We have to look at the total package if we want to understand.

To: Mark Brophy who wrote (3419)	7/17/1998 1:55:00 PM
From: Allen Benn	Read Replies (1) \| Respond to of 10309

>That's a good suggestion (i.e. charging off the real cost of options). My point was that expensing actual costs of options is nonsensical, and it can't be improved by dressing it up in a sophisticated formula that always yields reasonable-looking results. FAS 123 is dumb as it is, and it would only be dumber if it tracked actual costs. I apologize if I failed to convey this properly. On the other hand, if you understood my meaning and intentionally twisted them by taking words out of context, then stop it. You keep making the point that Dick Kraber is overpaid relative to the competition, when options are included. Somehow it's suppose to bother me that he has options worth with a gross value of $1 million. Mark, what bothers me is if Dick ONLY makes that kind of money. Dick is the CFO of the software company best situated to benefit from the third wave of computing, which is destined to be vastly bigger and more powerful than everything that's preceded it having to do with computers. I expect Dick to make $millions, even $billions, at least I truly hope he does, so I can too. The other CFO's you listed only qualified for, or mistakenly picked, lessor companies, which is unfortunate for them. You know that PTEC is struggling in what has become a commodity BIOS business, which is reflected in its price. INTS has to play second fiddle to WIND in a winner-take-all-game, and is having to change its business to model toward services (including supporting Windows CE). I wouldn't expect either of these CFO's to have options packages with a value that even approximates Dick's. As for RSYS, clearly you jest. RSYS management may be first-rate technically, but the company is struggling, possibly for survival. Their margins starting getting squeezed last summer, and have gotten worse ever since. They are now warning about a break-even quarter with revenues at $24 million, after warning earlier of revenues being within the range of $28 to $33 million, and still profitable. By giving specific revenue numbers that proved out to be wrong, the company is almost certain to be sued after issuing its latest quarterly report. As far as the CFO of RSYS being smart, how come he announced a stock buyback soon after the last disastrous quarter? With only $21 million in cash, and negative cash flow, the company can not afford to be buying back its stock. The market knows that, so if the company drains much cash trying to get back to profitability, traders will take it down. (Re-read my latest post on buybacks, to see that RSYS violated rule number one: NEVER BUY BACK STOCK IF THERE IS ANY CHANCE YOU MIGHT NEED THE MONEY.) Further, why did the company (he) announce specific 2nd and 3rd quarter revenue and profit ranges when the company first warned? Why are they (he) behaving as though they are in denial about the turmoil that is affecting their business? Frankly, the RSYS CFO has exhibited extremely unsophisticated behavior unbecoming a high-paid executive, so I'm not surprised if he is paid low relative to others. Dick Kraber, on the other hand, is CFO of a company with over $200 million in cash - thanks to him - and is cash positive, which he maintains through rigorous budgeting and execution. Dick is worth much, much more than the paltry $500 to $1 million you claim he is being paid, and I only hope that one day he will receive his fair due. I know you are heavily invested in RSYS, and I wish you well with the company. As a matter of fact, I wish RSYS well, if only because they have displayed ingenuity regarding telephony products containing I2O. Nonetheless, I fear that the company may get trounced over the remainder the year, due to market forces beyond their control, and due to denial and mistakes every bit in their control. Allen