InterDigital Inc (IDCC)

[The Count]

Dishfan, you make a good point

about what stock options do, but it leads me to a different conclusion...

Stock options accomplish the following: 1) a strong incentive for the employee to focus on stock appreciation, 2) improved employee retention, and, 3) highly efficient cash management, ie. an incentive plan that costs nothing and adds to cash balances.

1) They already hold enough shares and there are plenty of shares remaining to make stock appreciation a selfish motive (not meant as a slam, it is what makes capitalism work) as well as part of their job.

2) In the current economic situation, I don't see retention being the problem it was, and again we have plenty of stock still available to management if needed.

3) IDCC has plenty of cash and the cash flow should be very positive according to managements CC after the ERICY settlement. IDCC is not a cash strapped start up looking for capital. Why would someone want options instead of cash compensation? Because they believe it will be worth more. A company makes that deal when they have liquidity problems. It doesn't make sense for the company when its cash position is expected to be exceptionally strong already.

I have to take issue with the statement it costs nothing. It does not deplete cash, but there is a cost to the owners, it just does not (yet) hit the FS.