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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Geoff Nunn who wrote (52275)	7/19/1998 9:23:00 AM
From: DoggieDude	Read Replies (1) \| Respond to of 176387

While the accounting tactics associated with employee stock options may not be in the best interest of the stockholders it at least ensures that the employees have a vested interest in the price of the stock. Since the members of the uppermost management have the greatest opportunity to affect stock price, I'm happy to see them have a large interest in the company.

To: Geoff Nunn who wrote (52275)	7/19/1998 12:41:00 PM
From: SecularBull	Respond to of 176387

I'm not disagreeing that the whole accounting game is a problem. I believe, however, that the diluted number from DELL tends to be very reflective of the current exposure. However, for the average investor, it can be confusing. LoD

To: Geoff Nunn who wrote (52275)	7/19/1998 3:31:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Geoff, thanks for your thoughtful comments on this issue. I was going to suggest something like the Black-Shoales calculation, but didn't want to get sidetracked from the major issue as I see them: 1. Stock options as a form of employee compensation have a cost; 2. That cost is not accounted for by GAAP accounting; 3. The cost is hidden and borne by the shareholders; 4. The practice does not encourage employe loyalty because the stock is not restricted. Indeed, tax considerations encourage immediate sale of stock obtained through exercised options; 5. Diluted share calculations fail to estimate the impact of options; 6. The total remuneration of many top executives is out of all proportion to their economic worth to the firm, and is the result of their being able to successfull hide their total remuneration packages through a lack of proper accounting. Item 6 above deserves a bit more explanation. When Eisner departed Disney there was an uproar from unhappy shareholders. The problem is that many of these same shareholders voted for his compensation package without any understanding of the costs. That lack of understanding exists because GAAP accounting was designed to disclose shareholder transactions as financing activities not compensation expenses. TTFN, CTC