Replies to post #61744 on Intel Corp (INTC)

[The Duke of URL]

There are three separate issues here and mixing them up only confuses and derogates the logic of the arguments.

1. Can employee stock bonuses be..."good" as compensation.

The answer is is clearly, yes. You are rewarding, if properly applied, employees with a means that DOES NOT REQUIRE CASH and that makes the employee a stake holder in the company.

IN ADDITION, the company gets a huge tax and accounting benefit from the stock grant. The stock grant does not cost the company, anything. It is a direct gift/grant from the existing shareholders to the employee. As such, in the past, there was a very little deduction to RETAINED earnings, not current earnings. In the past, current earnings could remain high, which, in a simplified manner, INCREASED the value of the outstanding existing shares.

2. Is a stock bonus detrimental to an existing shareholder.

The answer is not so clear. IF the stock bonus, whether by option or grants of restricted stock is "properly" granted, the company gets a "quid pro quo" and for example, gets a dollar plus of services, for a dollar of stock. This IS NOT DILUTIVE. The problem exists as to what the company gets in return. If the company does not receive the quid pro quo, the existing share holder is diluted.

3. What is "properly granted"? This applies to stock bonuses, options stock grants, ANYTHING which transfers an equity interest other than cash.

This is a very simple question to answer, and it depends, not on argument here, but on whether each individual poster likes it.

The REAL problem here is knowing the facts.

Clues: You cannot tell by a 10Q which lists the totals. If the executives are dipping big time and the rank an file get small amounts, the balance sheet which shows totals, will not disclose this.

It is my belief that Craig Barrett got one year about 300 Million dollars in stock bonuses, for the year. IF this is correct, I want to know the details, not the gloss.

Clues: What were the amounts for EVERYONE, when Andy Grove stopped being CEO, before and after. My belief is that the biggest individual one year stock gift before was about 10 Million dollars, and after, well, you know.

Clues: Stock bonuses are alright if they are awarded for activities that the individual employee has under his control, not just for general appreciation, unless it is a rank and file grant of a small amount of shares every year.



These are three separate issues, confusing them destroys any meaningful discussion of stock grants.