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[Tanner Lovelace <lovelace AT wayfarer.org>]

On Wed, 2002-03-13 at 12:33, Michael Czeiszperger wrote:

> The stock option issue as I understand it is that corporations are allowed 
> to 
> not report any money spent on stock options as expenses when calculating 
> profits or earnings per share for their annual report. This makes it very 
> attractive for companies to pay employees as much as possible through stock 
> options plans.

I read an interesting article about this recently that had some
eye opening figures with regard to nVidia.

http://biz.yahoo.com/ms/020301/13444.html

Basically, the company is allowed to deduct from their earnings
however much an employee earned when cashing out stock options.
This can be huge at times.  For example:

   "In fiscal 2001, NVIDIA generated about $68 million in cash from
    operations, with $63.2 million coming from the option-related tax
    benefit. In other words, if NVIDIA's stock hadn't been on fire and
    employees hadn't exercised boatloads of options, the company would
    have generated very little cash that year."

Tanner
-- 
Tanner Lovelace | lovelace AT wayfarer.org | http://wtl.wayfarer.org/
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