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To: Joe NYC who wrote (66684)	10/14/1998 10:29:00 PM
From: Moominoid	Respond to of 186894

They will be given to employees They're not normally "given" to employees. They have to buy them at the option exercise price. The rip off is when they then sell them to people in the market for more if the stock price is higher. This definitely inflates the profits of companies like DELL and MSFT which would be overvalued even without this going on. Also DELL and MSFT sell puts on their stock which adds a lot to profit when the market goes up but will reduce profits if there is a sudden reversal. David

To: Joe NYC who wrote (66684)	10/15/1998 3:04:00 PM
From: nihil	Read Replies (2) \| Respond to of 186894

RE: Option rip off No one, especially compensation consultants knows exactly how workers are motivated to contribute to stockholder value. There are many tricky compensation models from the days of Taylor. Nothing has worked better than the boss having a big investment in his own company and it is becoming clear that promising executives ownership has been very effective in inducing EPS growth. I would go farther. I believe much of the success of the Silicon Valley model is the widespread distribution of options. Companies like Microsoft and Intel with options spread among a large fraction of the workforce have enviable 10 year growth records. Companies like Dell and Microsoft grow well in part, I believe, because their CEO's are owners and share risks with other stockholders. They perform especially well because a large fraction of the workforce acts as if they are substantial owners and have much of their personal wealth invested in the future of the company.

To: Joe NYC who wrote (66684)	10/15/1998 5:03:00 PM
From: DownSouth	Respond to of 186894

> The goal of the game is to rip off the shareholders. Being in the tech industry myself, and experiencing the motivated culture created in companies with generous stock option plans (and usually less generous salaries), I can tell you that what the stockholder is getting is a highly involved, highly motivated set of employees who share the same goal as the shareholders--raise the stock price. And how do you raise the stock price? Growth and profitability. Where's the rip off?