Sunday, April 20, 2008 12:04:34 PM
Re: Options are useless since the SP is going nowhere. You get an option and five years later they're worth a few bucks more. I'm pretty sure these aren't incentive options so you pay the IT when you get them. Same thing with RSS's. I don't think there are a lot of workers who enjoy paying the IT on something there are not too sure is going to appreciate.
Pay the IT? What do you mean?
Options don't cost the employee anything unless they exercise them, and they won't do that if the stock price doesn't go somewhere. And I would strongly disagree that options in general aren't a good motivator to get the employees to work towards raising the stock price.
RSUs are exercised automatically when they vest, and the employee gets shares, minus the taxes required at the exercise period.
Either way you look at it, options and RSUs are a form of employee compensation. If Intel removed them without raising salaries, I think you'd see a max exodus of good employees from the company. Not everyone would leave simply on the basis of a benefits cut, but can Intel afford to lose any of their key personel at this point in the competitive environment?
Re: Back in the day, when you got a 15% incentive (gift) at either the beginning or the end of every six months and the SP was moving, you couldn't pour enough money into that deal.
A 15% incentive is a good thing whether or not the stock price goes up. That's a fantastic benefit, but options and RSUs are a gift for entry and continued service. If they go away, you would naturally expect salaries to go up. The question for you is rather you'd see the charge be part of operations (thereby depleting EPS), or as part of cash flow to hold back dilutive effects.
Your choice.
Pay the IT? What do you mean?
Options don't cost the employee anything unless they exercise them, and they won't do that if the stock price doesn't go somewhere. And I would strongly disagree that options in general aren't a good motivator to get the employees to work towards raising the stock price.
RSUs are exercised automatically when they vest, and the employee gets shares, minus the taxes required at the exercise period.
Either way you look at it, options and RSUs are a form of employee compensation. If Intel removed them without raising salaries, I think you'd see a max exodus of good employees from the company. Not everyone would leave simply on the basis of a benefits cut, but can Intel afford to lose any of their key personel at this point in the competitive environment?
Re: Back in the day, when you got a 15% incentive (gift) at either the beginning or the end of every six months and the SP was moving, you couldn't pour enough money into that deal.
A 15% incentive is a good thing whether or not the stock price goes up. That's a fantastic benefit, but options and RSUs are a gift for entry and continued service. If they go away, you would naturally expect salaries to go up. The question for you is rather you'd see the charge be part of operations (thereby depleting EPS), or as part of cash flow to hold back dilutive effects.
Your choice.
