Hey. Stock options. I think I hit a hot spot with stock options. My view is that they are great for pre-public companies. It's a way for start-ups to incentivize people that work extraordinary hours for little compensation. However, when it comes to a public company, stock options should be and are an expense against earnings. Companies that disagree are lying. Don't think that is a big deal? It is. If Microsoft expensed exercised stock options as wages, it wouldn't have earned any money since going public. That is a sobering thought.
It's funny, most commentators and companies always try to hide behind employees on this. They would call this a democratization of stock ownership. That's BS. The cruel fact of the matter is that management gets the lion share of stock options and not employees. This is not about a democratization of stock ownership. It is about how much money Larry Ellison or Michael Eisner can stuff in their pockets before they run their companies into the ground. What's worse, if you read the recent sad tale in the NYTimese magazine, copycats in the regulated monopolies, like SBC, have jumped in. They can claim "marketplace compensation" based on revenue -- even though the equivalent compensation is a farce -- to get their deals. [John Robb's Radio Weblog]
