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

To: nolimitz who wrote (96676)	2/10/1999 11:39:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Sure, options transfer the cost of executive compensation from the company to the shareholders and bypass the income statement (because purchase and sale of one's own stock is not an income statement item). So when you see "earnings" they do not include the cost of employee stock options. The commonly stated goals of stock options is to put employees and shareholders on the same side. Unfortunately, tax laws encourage the immediate sale of stock once the option is exercised. Also, companies have a terrible habit of "repricing" the options if the stock price falls. Thus the incentive argument falls apart. This practice exists for the vast bulk of high-tech companies. Some, like SEG, are pretty outrageous in their repricing practices. TTFN, CTC