Re: MY ANSER: It was obvious to me that “these were not new grant”. The issue I have with Intel’s management is that it is unfair to the shareholder to spend such a large fraction of the earning on repurchase of shares. I believe that we (the shareholder) prefer a significant larger distribution as dividend.
You do realize that Intel's dividends are among the top for semiconductor companies? Or that the benefits they give to employees help to retain the best minds in the industry?
Perhaps if you are a short term shareholder, you might prefer that Intel spend this money on you, but some of us longer term shareholders see the benefit of retaining the brain trust inside the company. Intel's superior product portfolio today is a result of those engineers who remained with the company through their stock and options benefits, and Intel's competitiveness in the future depends on keeping those engineers employed. If that results in necessary stock buyback to keep the stock from getting diluted, that seems to be an appropriate and necessary step as far as I am concerned as a long term shareholder.
Also in terms of dividends, Intel's pattern has been to increase these on a yearly basis. Following the trend, I would expect Intel to pay $3.0B to shareholders this year in the form of dividends, and it may go higher in the future, if profits continue to be on the incline.
Furthermore, given that Intel has transformed from a steady growth stock to a more mature company, they have taken the right steps to evolve employee compensation from largely options based, to largely RSU based. This will reduce the number of dilutive shares per year, and reduce the necessary costs of stock buyback.
Lastly, we have one of two possibilities for the direction of the stock. Either it remains flat, in which case a large portion of those half billion option grants will expire worthless, and the necessary stock buyback costs will decrease, or the stock will go up, in which case Intel will need to spend more to alleviate dilution, but in that case, you as a short term trader should be happy anyways, since the stock price will have gone up.
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