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RWK
Options are not the only way to provide stock based compensation. I think there needs to be a good explanation for the large increase in the program especially after a 3 to 1 reverse split which arguably makes each share worth more. Speculating on motives is fair but hardly sufficient to prove need.
Ramsey
You may be confusing options and the stock purchase plan. The SPP design is not atypical and takes advantage of certain tax rules (however I did think the benefit had been reduced to 10% from 15% below market price). A good deal in theory for employees.
For options, these are almost always given at market value (notiwthstanding the backdating) due to tax rules.
Not sure if this answers your question.
Ramsey
True about the instntaneous statements but there also needs to be a solid grounding for the amounts available and granted. As you know once approved means you have little say on how they are granted in the future.
Kev
The distinction between base pay and guaranteed bonus seems silly but it does reduce the termination value since it is based on base pay.
The toal compensation (450K) just doesn't seem too high for a CEO with his responsibilities. However the incentive pay basis is really too vague. While I can understand there needs to be a balance of factors, Wave's actual revenue and earnings should be part of it.
Cygnuscap
The increase in stock for the plans is a worthy dicussion.
I am surprised about your comment on >10% as I believe it is less rare in hi tech as you indicate but more recently have been switiching to other forms of stock based pay.
As for his pay, I do not find a compensation level of $500k too high for the CEO of a company. Not to sday that there aren't some who earn less, but $500k is not what it was 20 years ago.
Wash68
While I am certainly not supportive of someone who is shorting a company that I am invested in, there is sometimes information or issues raised that are worthy of understanding.
There is little doubt that the current Board is not as independent as we might like and that often compensation arrangements are more conflicted than they should be. This is not unique to wave as the massive options backdating scandal impacting many other companies indicates. And of course hedge funds have also corrupted the process through illegal deals with borkers, writers etc.
Still that does not mean we should simply ignore anything that Wave's Board recommends and implements. I am interested in understanding the rational for the stock grant guideline increases. If the amount of stock available and its price are adjusted following the split, why should everything be increased by three. I am not following the math even though there are lots of threes being thrown around. Is this is basis of a poison pill which I might support by the way.
Cygnuscap
At first glance, I also would want to know a lot more about why the stock pool and stock grant guidelines should be tripled following the 3 to 1 reverse split. I assume there will be information provided to explain why this is being recommended by the Board. (And this is not a set up to say that they just want more).
As for your other comments, do you have some benchmarks as to Director pay (in its various forms) to support your comments. I don't dispute them since I don't have benchmark data but it is also not clear that they are way above market.
As for bonuses, I only thought that part of the bonus was essentially "non performance" and is in essence deferred pay (presumably not guaranteed). Clealry there is a better way to characterize it.
Mundo
There are ongoing compensation limits for eligbility. However (and this is by memory) there is a one time exception to the rules for 2007 which allows anybody to convert exisitng IRAs into Roth IRAs. I intended to look into that but haven't so this may not be accurate.
Since the conversion typically results in taxable income for convertees, my sense was this was a short term revenue generator and thus the exception. The government has sometimes allowed exceptions to the rules in the past for this reason.
Whether converting makes sense is another story. At some point this year I will investigate if the exception is real.
Interesting read but the writer is simply wrong.
If he believes that no one saves content on their harddrive from off a LAN. He doesn't work in the real world.
Doma/AWK
I see what you posted. Hopefully that means that they will affirmatively position Wave like Seagate did. When SKS spoke I didn't infer that they were engineering something with Hitachi (just talking) and after all these years I am sensitive to the precise words he uses.
AWK
I did not say they had bypassed TCG or would intend to do so in the future. Rather I said that these drives could work without the use of a TPM (wasn't there even an option to encrypt or not encrypt) and that Hitachi might be checking out the market before they decided it was necessary to accomodate TPMs and in turn enter into a contract with Wave. And I was responding to the immediate conclusions people often reach when they immediately equate a product release with money immediately in Wave's coffers.
As far as I know (which may be lacking) Wave and Hitachi do not have a signed contract. In your opinion could Wave's software work with Hitachi's drive without any specific up front engineering work on Wave/Hitachi's part? Or is it so clear to you that they have engineered and tested the design collaboratively like they did with Seagate?
My inference from SKS' comments was that that had not entered into anything specific with Hitachi but that they had talked a lot. That sounded like classic SKS doublespeak.
Micro
This is an excellent example of where we either get ahead of ourselves and presume too much or it's so obvious that we shouldn't ask.
All that I know is that Wave and Hitachi have discussed support for TPMs as a result of their successful work with Seagate. We have seen no indication that Wave and Hitachi have actually worked together in a contractual sense and in the recent conference call, SKS specifically said we do not have a deal as of now.
While I would be inclined to think Hitachi would not try to recreate everything Wave did, I also am not convinced that Hitachi, today, sees the same trusted framework that we discuss here all the time. At this point, they could be focused on just engineering a drive with an option to encrypt or not to encrypt with some other key support and waiting to see how the market evolves.
Chowder
The real cost to a firm that has lost data is multiples of what one reads as direct costs to notify people. Multiples.
Micro
Clearly there is going to be a big dfference between the sensitivity of information on a personal and business drive. But one observation I'd make is that you are far more skilled and knowledgeable about PCs than 99.9999% of users. Consider when I do my taxes. Unless I always use a portable drive, I will wind up with some very personal data on my hard drive. And I have no confidence that it will go away when I say delete. I'm sure somewhere there are other personal items that I don't even know about. My whole email files for example. That by the way is a huge issue for businesses where over time users have no idea what has been saved or arrchived on their machines and definitely not enough time to figure it out.
If you have a desk top at home, then then theft is not a real issue (possible but unlikely) and getting hijacked is also a low probability. But if you have a personal laptop and you travel with it, you probably have an even bigger chance of losing it than a business computer (you are likely to be less careful).
I don't think the average user is dealing with this and most will not jump at a chance to get encryption (some will). But I do think there is an issue and if educated more users would address this and the other issues they face but ignore.
As an aside one thing that really bothers me is phishing. I've concluded that I would be unable to ever tell if a site is legitimate. Thus I don't respond to anything anymore which seems insane. I also have no sense of the risk of responding even if you don't supply much information. If I have this attitude and I'm just below you in terms of computer knowledge (97.5%) I can only imagine what this will do for internet services for adults. I assume kids have no common sense and will do whatever.
RWK
The only thing I can add is that the OEMs release computers in cycles and the FDE delay could have shifted the release into the summer (missing an earlier date). Given that and perhaps that the FDE drive hasn't been fixed completely (note SKS comment about sleep) maybe the tier 1 OEMs are really waiting to sign up.
KEV
Maybe you have more actual experience than I, but from my experiences, mobile employees travel with data and files that they need and the process of saving and then deleting all files on their laptop (and then redownloading it the next day) seems far fetched. Never mind the mobile employee who needs to do this on a VPN as they are not sitting in the office.
Kev
I am not sure what kind of business you work in but I can tell you that many people maintain information on their lap tops for example that are also not separately maintained on a network server and backed up.
It may not be a good practice but until anyone can have quick and efficient access to any files anywhere in the world, it iwll continue. In fact we wouldn't be having such an issue about lost hard drives if everybody could access a network server an dnever needed to have information on their harddrive. Once it is on the drive, it requires efforts and process to get it off.
So the issue of not being able to access data on your drive is a real one.
FDE delays
There were many questions about why Seagate launched with a small PC maker. It was my understanding that one reason no major OEMs were part of the initial launch was the sleep issue with the FDEs. I can never be sure but I did note SKS' comment on the blog that is indirectly supportive of that rational.
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It was originally thought back last fal that a drive would not have to have any information about the PC on which it ran. ie the software is not customized to the bios. This turned out not to be true and customization is required to enable Standby mode on your laptop. This had the effect of a small amount of sand in the transmission. In the short term it created delay. In the medium term it gives wave a huge advantage because we are prepared to understand bios configurations and to support testing on multiple platforms from multiple vendors. We currently are supporting all of the major OEMs with tdm Most of tier 2 and most of tier 3. Keeps all the hands and feet busy. I think the other software vendors are not as well prepared to do this and may never do it.
the first ASI and tarox machines support on and off and hibernate but not sleep.
Jakes
If I recall, I believe SKS was indicating that Seagate's drives could work without utilizing anything related to Wave and thus only some of their drive sales would result in revenue to wave. Whehter this is just a CYA statement with few instances or one where it occurs often will play out. Always remember that simialr comments were made with TPMs - I do think this is a different context but it is important to recognize that we tend to quickly and firmly bold these dots - prematurely at times.
John
Certainly that could happen. But in this context, if I were the CEO I'd be concerned if 100% of what I was talking about could be deferred and I knew that anything above zero would be a notable accomplishment for the quarter. He could have said that we have closed or are in the process of closing several thousand plus deals but I'd caution that recognition might be pushe dout a quarter or two.
That's a stronger statement than we have x hundered trhousand in the pipeline but not as strong as we have sold upgrades this quarter.
Cosign
In the call, SKS said no deals have been signed although they continue to talk with prospective customers.
NTT is a good example of why it is not possible to predict how and when relationships pan out. Obviously in the past, they essentially never seemed to translate into anything material and it continues to surprise me. I realize some of these strategic relationships are not much in reality but in many cases companies spend a great deal of time getting to know each other and working through protocols before they ever say anything in public. And they usually do it because they feel it makes business sense and there are opportunities. My take is that the Wave story is quite enticing on paper but that the marketplace just hasn't bought in (yet). Thus these co-marketing deals don't turn into revenue and ultimately they end or at least go into hibernation.
That doesn't mean that is the fate of NTT since that represents a huge slice of Japan and there are related events occurring around the TPMs - but it does say that our perspective on market readiness for action continues to be too optimistic so far. Will that change? Hopefully maybe even tomorrow??
scorpio
The amount of back and forth has been substantial this weekend but that is inevitable given the results and the lack fo guidance.
In my opinion, the Seagate guidance about the contract was reasonable and the fact it took longer was not a "lie" as I can appreciate that contracts sometimes take longer than expected to close (actually they almost always do in my work). On the other hand I am far less happy with the upgrade outcome. My take on his comments in the last call were that the upgrades were purchased as he made the comments in the middle of the 4th quarter. I guess the 10's of thousands could not have been purchased at the time but the strong implication was that they were a done deal but the purchase was being made after the calendar year end. The previous breakeven comments had some wiggle room in that they were based on customer projections of bundled computer sales but since there has never been an explanation of what changed, I think one should view it in the same light as the 1,000s of upgrades in Q4.
I bring this up since it materially weakens the value of any guidance tied to numbers and further makes opaque our understanding of just how much progress is being made.
There are many logical projections being made by folks which are further fueled by SKS' comments. Those expectations may need to be adjusted or at least people should be prepared to seriously question them if they continue to remain unfilled.
Genz
He always says that and it always should not be taken literaly. Of course they have an idea of when and how to get additional funds and as has been noted by many, this is one of Wave's core competencies. I do think that they don't have a good handle on when revenue from various prospects will come in and thus they tend to wait towards the last minute to pull the trigger. If they had really been primed to go, we would have seen something after the Seagate spike.
Trust
Not unreasonable. I did not think they could continue financing in 2006 without a real breakthrough in revenue. Stretching it though 2007 is going to be tougher without some clear evidence that one or more of their products is taking off. With full product lines containing ETS and Seagate drives being really available this year plus the other opportunities, no traction would seem to be tough to explain. There has always been a rational so far, but time is not on Wave's side.
I've never reconciled the information concerning more OEMs and the essential lack of any public information for months thereafter. Maybe the Seagate plans really were deferred or extended leading to ll the apparent delays.
I completely agree that this will either change the situation or Wave cannot punch itself out of its balloon.
But the notion that their focus is to be everywhere and leverage that position for the real revenue continues to be quite interesting. It would be quite a conclusion that they really had an exquisite plan that took several years to implement and they stuck with it despite the zillions of distractions. Might be a Harvard business school case study of strategy implementation???
Conditional Access
Years ago (incredible how time passes on), I used to regularly discuss conditional access with SKS when Xpress was posiitoning itself with cable companies. The angle was with Embassy, set top boxes could be built more generically and Embassy could be programmed to allow and charge for the right access depending on what the user had purchased.
Sounded like a big winner but it never came to fruition. But Wave has continually emphasized subscriber management but TPM with Embaasy is the new combination.
One perspective was suggested to me. If Wave can be included on 100's millions of computers (for whatever reason), will they be able to leverage that to different content providers since they can manage the subscription management?
How will Wave be so deployed? The recent discussion about Seagate, never mind Dell, Gateway and Intel suggests there are many ways to be included and then bring access to these customers to content providers.
It's all still a dream but it all seems possible even the share price and the market place just can't believe it.
Lost laptops
I will not get into any details but I can confirm the loss of laptops with client/customer information has an extraordinary high cost (direct, reputation and potential client loss). If companies conclude this is a real solution that can be introduced and managed in many different environments, they will kill to get it.
I would expect and we have seen presentations where Dell in fact emphasizes security and Wave is a big piece of that puzzle. In general all we say are adds and materials geared to individuals and perhaps small businesses.
There is a large sales system geared to enterprises which I expect is indeed emphasizing the benefits of trusted computing and Wave is very much in that mix.
The uptake has been slow. It is not apparent to me that there is much more Wave could do - it is an industry issue and it is due to corproate inertia and the complexity and direct cost of materially changing an entire infrastructure.
It is simply unlcear today to know with certainty that wave can remain viable until these conditions change. All you can note however is that every day we get closer to the point that the purchases will occur and so far Wave is still in the leadership position to accrue those benefits. But I do think delays can only hurt and not help wave at this stage.
Howard
Are you suggesting this because we have not seen an 8K reelased with terms of a bundling agreement.You sound pretty sure of yourself but that is not consistent with my understanding.
I did not understand what you were saying about EMC, IBM and Checkpoint.
Can you please elaborate clearly. Thanks
Howard
Seagate will be releasing their drive shortly and soon we will see and understand the arrangements with Seagate. Wait a month and reply to this.
wavestation
A recent NY Times (or Wall Street Journal ) article discussed AT&T and some of their difficulties competing against cable and other digital media companies. One issue cited was the problems associated with Microsoft's software supporting IPTV. Apparently it has not been going well: seemed liked a combination of Microsoft's and a limitation on the technology being used.
wavx
At this time you do not even need to specualte on this question because Infineon doesn't supply the suite of products needed to implement TPMs across the government.
I think its also true that it probably wouldn't matter if they did since Wave has spent over 5 years developing relationships and developing the specifications for the architecture.
The only threat to Wave here is if the government decides to not secure their network - not very likely in my opinion.
Howard
One can choose to believe or disblieve SKS (and others) about the status of the Seagate/Wave arrangement and what has been going on. My personal take on it is that when Seagate is ready to start selling its drives ( within a month?), there will be information provided about the contractual arrangements that wave and Seagate have entered into. The best information available is that it will cover situations when a PC OEM has a deal with Wave directly and situations where there is no deal and Seagate and Wave will need to have their own arrangement.
The good news is that if Seagate wishes to sell their drive with the added protection of a TPM, Wave's software will be part of the mix. There are no other providers of this functionality - at least we have not heard of any providers in any conversations, meetings, PRs etc.
Clearly achieving the financial results we hope for depends materially on the success of the FDE and Wave's role in the distribution.
CM
One of the first books a software engineer gave me when I became responsible for a big project/business explained how throwing more people into the mix increased the effort exponentially. All software engineers, including our esteemed Larry, know this even if they don't admit it in the Wave context.
Snackman
While I know he thinks Wave will be at BE in mid year, I doubt he knows that. Otherwise that suggests that he has a big gov't deal in hand or massive other orders in hand which I doubt. If true he will say it on the next call. I agree that either the Seagate deal is really set as he has consistently indicated.
OT Doma
So you are saying that nothing is actually broadcast in 720 P. It represents a down conversion from a 1080 signal. I had thought (originally) that some station broadcast in either 1080 or 720 and that some sets came in either 720P or 1080 i native resolution. So your comment about 720 is a surprise to me. Some other time I'll ask about PSF
toro
He has reiterated that prediction after he indicated it would not occur solely from basic license revenues from OEMs. That means that upgrades and new licensing sources such as from Seagate are necessary. It appears that he continues to believe they are on track. If he doubles revenues every quarter then it would be 1.3 in Q4, 2.6 in Q1 and 5.2 in Q2. Sound simple?
Larry these are not my predictions - I only predict after I know for sure.
doma
HD is merely an arbitrary designation - it could have been anything but 720 P is the minimum for the designation. 1080i and p are better respectively.
Zen
I am not trying to be an apologist. In fact I view the situation as one that can not be explained publically to anyone's satisfaction. If it were possible, we'd best give up on most of these discussions and simply wait to see what happens. Sometime's the deep due diligence can provide some comfort around what is happening in the industry. But when it is very Wave specific I'm afraid the only real and useful information can not be shared until it is ready to be shared.
The timeframes that forecasts cover should be better explained/caveated however. But I wonder about the reaction due to a statement that says we expect to sign an agreement with NTT that could become a huge deal for us for the following reasons... However in our experience working in Japan and with very large companies often working on very large projects that the likely tiemframe could be measured in a year or more. Thus don't ask about it again for long while and certainly not twice during a given quarter.
Now you know why some companies want to go or remain private.
Zen
When SKS and /or Wave say nothing, many people complain that they are not saying enough. Some even say it means nothing is happening.
Because Wave is still so insignificant, the absence of information is extremely prominent.
When SKS says anything and it is not absolutely clear and certain, he gets castigated even if he tries hard to explain why he can't be precise.
If he tries to be more precise despite the uncertainty and it doesn't work out as forecasted, we have what often happens.
So their general strategy has become to say as little as possible, but more when you need to finance the company because in the absence of information where else can the stock go but down. If someone contacts him or others with a specific question, it is usually answered and it provides additional color. But I think one needs to not over interpret it.
This is not a good set of dots and clearly the best solution is just to close the deals, sell the product and let the revenues do your talking.