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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Allen Benn who wrote (3422)	7/18/1998 11:07:00 AM
From: Mark Brophy	Respond to of 10309

Re: Philosophy of option compensation You claim that Wind River has more potential than the other 3 companies I mentioned. If so, then executives should be given fewer options than the competition, not more. Novell is a lousy company with a poor outlook and was forced to give a large options package to Eric Schmidt to entice him to accept the risky CEO position. Sun is a successful company with a bright future and was able to replace him easily with many highly qualified candidates, so they can easily afford to be stingy with stock options. Lou Gerstner has deservedly become very wealthy for turning around IBM when many had given it up for dead. Conversely, Gates' minions are known as "Microserfs" because they work long hours and their base pay is low. They expect to become wealthy from a small number of options that rise a very large amount. Another example of this phenomenon comes from the RTOS industry. A year ago, even the most bearish on this thread admitted that Wind River was taking market share from ISI, the former leader of the industry. ISI was also losing money and the outlook was grim. Today, the situation is completely different. They released pRISM, market share losses have been arrested, revenues are rising, profits are being made, the outlook is bright, and the stock price has risen from 10 to 17. Thanks to this miraculous recovery, the 80,000 options of CFO Smith have earned him an additional $560,000 for his outstanding performance. If Wind River stock rises 15% above the exercise price, CFO Kraber is paid an additional $600,000. Why should he paid more for a lackluster performance than Smith receives for performing a miracle?