Replies to post #21992 on InterDigital Inc (IDCC)

[EconEli]

george, it is impossible to prove a negative. So it is sensible and not nonsensical to discount what MIGHT have happened IF certain things HAD NOT occured in the past. How could you have a fact based debate on that? You can't, so I don't bother. For all you know, if IDCC shareholders had limitted managements buffet maybe they would have been more aggressive with NOK / ERICY / SAMSUNG etc. and maybe this stock would be worth $166/share. Can you prove me wrong? No, no more than I could prove your wild ungrounded theories wrong -- so why waste time with stupid arguments like that?

[Desert dweller]

georgebailey, if IDCC instead of only having 300 employees had instead 3,000 what percentage of our company should we set aside for options? At 300, we have given away 34% of our investment over the past 3-4 years. If we get the money that we expect and management has $500 million to spend, how many more people will they hire and then how much more in options will they need?

Think about how much compensation is enough. In prior years, actually only 1 or 2, you had major competition for engineers. Today the job market is considerably different and you don't have to compensate them the way they once had to. So if you want to argue that in prior years in order to attract and retain talented people, we gave away so much, that would be one thing. But to argue that in addition to very nice cash salaries, you also have to give away 10% of the company every year to retain these people then I say everyone at IDCC is overpaid. There is no way that with the existing options available for grant of over 5 million that for the next 12 months they need additional options. If they happen to use up those existing options, come back next year and explain why we need more and then we can decide if it is prudent to approve more. Today it is not prudent to approve more dilution.

So far we have not turned the inventions into recurring revenue streams that cause wall street to give us decent multiples of projected income and yet we have already given away 34% of our company with more to follow. When will these inventions turn into the recurring revenue and licenses? When that happens with the options already granted, management has been rewarded.

As I pointed out in a previous post, with the options currently granted of 3.3 million at an average strike price of $10, management today has a gain/bonus equal to over $40,000,000. That's right $40,000,000 divided by the 15 members of the management team. That is on top of the very nice salaries they have been given. Now when the stock goes up $10 or $20 or $30 dollars or more from here they will then have additional upside of 3.3 million times whatever the increase is. If they were currently taking below market cash salaries and bonuses for running a small/midcap company, then you could make the argument that they are taking options in lieu of cash. Our management team is not doing that. They are having their cake and eating it to and it is our cake that we purchased with our hard earned money.