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[Michael Czeiszperger <czei AT webperformanceinc.com>]

Tanner Lovelace wrote:
> 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."

And the best part is, when the employee exercises the option, the money they 
pay goes right back to the company. Its better than printing money!

The interviews I've heard from people who are not in favor of the stock option 
accounting rule change were interesting. The arguments I heard were:

1. There's already enough disclosure in the annual reports, so that even if 
the "real" profits aren't reported, professional analysts can figure it out.

2. Non professionals shouldn't be doing their own stock analysis anyway.


--
Michael Czeiszperger
czei AT webperformanceinc.com