Intel Corp (INTC)

[COMMON SENSE]

Microsoft

No other large tech company is in such good financial shape. The true cost of Microsoft's options, using the popular Black-Scholes model to value them, was $1.3 billion in 2002 -- about 12.7 percent of earnings that year.

In comparison, the value of Intel's (INTC: news, chart, profile) options was $1.9 billion -- about 55 percent of that company's earnings, according to research from Sanford C. Bernstein & Co. in New York -- one of the few research firms that isn't influenced by investment banking business.

The value of Dell Computer's (DELL: news, chart, profile) options was $1.6 billon, or 78 percent of earnings. Applied Materials' (AMAT: news, chart, profile) cost was much smaller-- $96 million -- but that was still 28 percent of earnings.

What's worse is that many tech companies were heavy issuers of stock options, and they had no earnings at all last year. Examples include Sun Microsystems (SUNW: news, chart, profile), Micron Technology (MU: news, chart, profile), Agilent (A: news, chart, profile) and JDS Uniphase (JDSU: news, chart, profile).