Replies to post #100372 on InterDigital Inc (IDCC)

[ubx]

Assuming your calcs to be on point, this incentive plan is costing us about $5 a share in stock value ($11-$12 million/55 million shares x 25 p/e ratio = $5 of shareholder value (before tax considerations) or 25% of the total stock price!) You can each decide if you think you are getting your money's worth.

The revelation in the 10-k that Samsung wants to be bound for 2g and 3g ala Nokia, could really add fuel to the fire of upward movement in the stock price if we win the arb and IDCC and Ericy sign a 3G agreement shortly thereafter. Could be explosive combination -- add on a lucent victory at the end of the year and 2005 could go out with a bang!! Here's to dreamin.

[Corp_Buyer]

RM- what is the total VALUE of the 2005 LTIP including cash and full value of the RSUs (not just the 2005 portion of the RSUs), since the RSUs will apparently create expenses for the coming years as well?

Also, do you agree that the total VALUE of the 2004 LTIP grants was about $11M, even though only $7M was actually expensed in 2004?

TIA,
Corp_Buyer

[rmarchma]

Long-term incentive plan compensation expense for 2005.

I might have made an interpretation error in my referenced post from last night based on the following statement from the latest 10K:.

…”We expect that the expenses associated with the performance-based cash incentive and RSUs will each increase between $4m to $5m in 2005 as we accrue expenses for both the final year of the initial measurement period and begin the first year of the first three year measurement period under our long term compensation programs”.

I did not see the word “each” last night, and originally interpreted that the recorded expense for the LTI compensation plan for 2005 would increase in total $4m to $5m over the LTI recorded expense of $7m for 2004 ($2.9m cash incentive + $4.1m RSU amortization). Therefore I assumed that the LTI expense would be between $11m to $12m for 2005 ($7m total for 2004 + $4m to 5m increase). This somewhat agreed to my original projection of a little over $10m for 2005 expense for the LTI plan

However I’m not sure if that is a correct interpretation, with the word “each”. Is this saying that both the cash-incentive part of the LTI and the RSU amortization part of the LTI will each increase $4m to $5m over 2004 amounts? If this interpretation is true, then the total LTI plan cost for 2005 will be between $15m to $17m. The cash portion of the incentive would be $6.9m to $7.9m ($2.9m in 2004 + $4m to $5m increase), and the RSU amortization portion would be $8.1m to $9.1m ($4.1m for 2004 + $4m to $5m increase). BTW Texb projected something like $15m LTI expense for 2005.

I’m still not sure if this is being interpreted correctly. To go from a $7m LTI plan expense in 2004 for 9 months to a$15m to $17m LTI plan expense in 2005 is too much IMO. Something doesn’t seem right. This is a new compensation plan btw, so its cost is all incremental additions to the operating expenses from what we had before the new compensation plan was implemented in April 2004..