it does cost him something, as the shares that he is giving have value, and are fairly liquid.
just because something isnt cash, doesnt mean that it doesnt have value. a painting by Monet has value, as does a Louis XIV dining room table, houses/real-estate has value, heck even beanie babies have value.
just because there isnt a cash outlay, doesnt mean that it doesnt "cost" him anything even though it doesnt affect his cash position.
>That is where the company will actually be out >cash, and be worth less.
why? wouldnt they be buying a fairly liquid commodity, in their stock, with cash? this is just moving assets from one vehicle to another, and there should be no material affect in their overall net worth.
in addition, companies generally only buy back when they believe their stock is trading under fair market value, so the company expects to be able to sell the bought-back shares at a higher price than when they bought.
I like ESPP's for big, stable, slow-growth comapnies, and ESOP's for small, explosive-growth type companies. I've worked at both types, and made real money with both plans.
If you're working in the tech industry, you really need to understand these compensation schemes, and be able to determine which fits your needs best, and how to maximize your personal return.
yeh - enron's big faux-pas was revenue-recognition. they would book entire value of contracts, that were not stable, when the contract was signed, and before delivery of product.
>The options with triggers are subjectively more >valuable, but how (and why?!) you'd want this >reflected on the books escapes me completely.
because they have a material dilutive affect on shares outstanding, and therefor affect per-share earnings.
if i owned 10% of the company, but there were enough options outstanding that if all excersize that it would reduce my ownership stake to 8%, this has a material affect. it should be accounted for.
options are part of compensation, just like health insurance, 401k matching contributions, and free caffeine.
these are, absolutely, positively part of my compensation package, just as much as my bi-weekly check.
its an incentive plan, similar to at-risk compensation schedules where you can earn an ext $FOO% of your salary if you perform, or the company performs to certain guidelines.
generally, because of the risky nature (i.e. they could be worth zero) there is a higher reward if the options work out.
over the past 3 years, my options have been worth about 30% of my annual salary. yes, i sold.
if i no longer received comparable options, or got a commeserate base salary increase, i would immediately start looking for a new job, as my gross compensation package is reduced drastically.
> Which still makes them how many years ahead of everyone else?
thats not really the point, there needs to be some reasonable expectation that entities can benefit from their risk-taking endeavors.
>a: They can only patent how to make a drug not the drug itself.
not true. they have an exclusive licence to produce said chemical.
>b: Production licensing isn't that high anyway.
ummm... in the case of pharmaceuticals... they dont licence "blockbuster" drugs for outsourcing, they exploit their patents.
>c: In that 7-10 years they will go from small >batch production to volume production, which is a >completely different process and would have a new > patent.
there is not a single pharmecetuical company in the world that would do "small batch" production. that's why they have all those Chem E's floating around. They know how to make cool shit in large volumes.
They dont go into mass-production doing small-batches. If a drug gets to clinical trials, you can be sure that their army of Chem E's are divining the method to produce that drug from pencil shavings and alcohol: in huge quantitites, in an automated fashion.
but knowledge, such as source code, was not meant to be locked up for an indefinite amount of time, as copyrights are post-mouse-legislation.
maybe we need to create a new IP category, specifically for software, one that enables closed-source shops to invest in their software, but also opens up their knowledge to public use after a reasonable period of time.
i do know that copyright, in its current form, is an extremely bad fit for software.
i think that patent protection is for a "type" of something, only a particular implementation.
as for 5 years for patents - you will have real issues with the pharmacy industry, where it takes 7-10 years to get out of linical and into production.
i'm not sure that the right law is copyright, though.
it seems to me that software is the practical application of mathematics, and far closer to engineering than an artistic creation, like a sound recording, movie or book.
in general, you are right - the "first movers" with a technology rarely win, and their competitors quickly copy any successful initiative.
this, in normal situations is healthy.
however, when one company has a monopoly on a good or service, they can then leverage that monopoly to extend their hold on the market. like integrating a browser, or designing your own rail cars...
well, at least the real estate market in the dc area makes CA look SANE.
seriously, i have a relative: lawyer, partner, big law firm, dc aree, 750,000 house that is a SHITHOLE compared to anything out here in "the real world"...
its amazing what people are paying for these little cramped things, just to commute to dc in less than 2 hours is insane.
however, you probably arent one of the exceptions. if you have the ability to get the degree first, it becomes a heckuva lot easier to progress from their.
it opens more doors to that first job.
it opens more doors to move up the ladder.
it opens more doors to getting hired "up the ladder" at another company.
sure, there are many success cases out there that didnt do it the traditional way, but there are many, many more cases of peopkle who DID go to college and work up that way.
Slashdot Mirror
and, believe it or not, before computers, people were able to do this with something called a "ledger", and a darn good filing system.
and funny red-filter hats for being able to see debits and credits.
it does cost him something, as the shares that he is giving have value, and are fairly liquid.
just because something isnt cash, doesnt mean that it doesnt have value. a painting by Monet has value, as does a Louis XIV dining room table, houses/real-estate has value, heck even beanie babies have value.
just because there isnt a cash outlay, doesnt mean that it doesnt "cost" him anything even though it doesnt affect his cash position.
>That is where the company will actually be out
>cash, and be worth less.
why? wouldnt they be buying a fairly liquid commodity, in their stock, with cash? this is just moving assets from one vehicle to another, and there should be no material affect in their overall net worth.
in addition, companies generally only buy back when they believe their stock is trading under fair market value, so the company expects to be able to sell the bought-back shares at a higher price than when they bought.
I like ESPP's for big, stable, slow-growth comapnies, and ESOP's for small, explosive-growth type companies. I've worked at both types, and made real money with both plans.
If you're working in the tech industry, you really need to understand these compensation schemes, and be able to determine which fits your needs best, and how to maximize your personal return.
yeh - enron's big faux-pas was revenue-recognition. they would book entire value of contracts, that were not stable, when the contract was signed, and before delivery of product.
really really bad moves on their part.
the stock holders are owners of the company, how can an expense to them, NOT be an expense to the company?
>The options with triggers are subjectively more
>valuable, but how (and why?!) you'd want this
>reflected on the books escapes me completely.
because they have a material dilutive affect on shares outstanding, and therefor affect per-share earnings.
if i owned 10% of the company, but there were enough options outstanding that if all excersize that it would reduce my ownership stake to 8%, this has a material affect. it should be accounted for.
i think that you are looking at this wrong.
options are part of compensation, just like health insurance, 401k matching contributions, and free caffeine.
these are, absolutely, positively part of my compensation package, just as much as my bi-weekly check.
its an incentive plan, similar to at-risk compensation schedules where you can earn an ext $FOO% of your salary if you perform, or the company performs to certain guidelines.
generally, because of the risky nature (i.e. they could be worth zero) there is a higher reward if the options work out.
over the past 3 years, my options have been worth about 30% of my annual salary. yes, i sold.
if i no longer received comparable options, or got a commeserate base salary increase, i would immediately start looking for a new job, as my gross compensation package is reduced drastically.
we arent taxing them when issued, we're taxing them when excersized.
we're talking about recording an Expense to the issuing entity.
there is no effect on taxation here.
please take a god damn accounting course - please?
you're amazingly ignorant on this subject.
there is no reason taht companies will not give out options now.
or, they will have to compensate you in another manner.
> Which still makes them how many years ahead of everyone else?
thats not really the point, there needs to be some reasonable expectation that entities can benefit from their risk-taking endeavors.
>a: They can only patent how to make a drug not the drug itself.
not true. they have an exclusive licence to produce said chemical.
>b: Production licensing isn't that high anyway.
ummm... in the case of pharmaceuticals... they dont licence "blockbuster" drugs for outsourcing, they exploit their patents.
>c: In that 7-10 years they will go from small
>batch production to volume production, which is a
>completely different process and would have a new
> patent.
there is not a single pharmecetuical company in the world that would do "small batch" production. that's why they have all those Chem E's floating around. They know how to make cool shit in large volumes.
They dont go into mass-production doing small-batches. If a drug gets to clinical trials, you can be sure that their army of Chem E's are divining the method to produce that drug from pencil shavings and alcohol: in huge quantitites, in an automated fashion.
>knowlege was never supposed to be patentable.
but knowledge, such as source code, was not meant to be locked up for an indefinite amount of time, as copyrights are post-mouse-legislation.
maybe we need to create a new IP category, specifically for software, one that enables closed-source shops to invest in their software, but also opens up their knowledge to public use after a reasonable period of time.
i do know that copyright, in its current form, is an extremely bad fit for software.
i think that patent protection is for a "type" of something, only a particular implementation.
as for 5 years for patents - you will have real issues with the pharmacy industry, where it takes 7-10 years to get out of linical and into production.
i'm not sure that the right law is copyright, though.
it seems to me that software is the practical application of mathematics, and far closer to engineering than an artistic creation, like a sound recording, movie or book.
patents end after 17 years.
copyrights do not.
how about C/C++ ? They seem to never go out of style.
in general, you are right - the "first movers" with a technology rarely win, and their competitors quickly copy any successful initiative.
this, in normal situations is healthy.
however, when one company has a monopoly on a good or service, they can then leverage that monopoly to extend their hold on the market. like integrating a browser, or designing your own rail cars...
or, adding a desktop toolbar.
oh, i'm interested now. what makes CR unreliable?
Ford F-350, Chevy CK 3500, Dodge Hemmy Ram...
John Deere, Navistar, Cummings Diesel...
i think that the words "toyota", "honda", "mitsubishi", and "hitachi" must be missing from your vocab.
Somebody SAVVVvavavVVVeve Meeeeeeeeeeeeeeeeeee....
good god, i'm watching way too much smallville.
so please explain to me what the hell it means when someone tells me that they built this against "redhat 10".
????
well, at least the real estate market in the dc area makes CA look SANE.
seriously, i have a relative: lawyer, partner, big law firm, dc aree, 750,000 house that is a SHITHOLE compared to anything out here in "the real world"...
its amazing what people are paying for these little cramped things, just to commute to dc in less than 2 hours is insane.
bah... my bets on the druggies...
oh, that is rush.
What I get out of this is "We dont know what it means, but it looks like at least SOME climate changes are caused by man".
and SOME studies suggest that cigarettes cause health problems.
some.
first, there are always exceptions.
however, you probably arent one of the exceptions. if you have the ability to get the degree first, it becomes a heckuva lot easier to progress from their.
it opens more doors to that first job.
it opens more doors to move up the ladder.
it opens more doors to getting hired "up the ladder" at another company.
sure, there are many success cases out there that didnt do it the traditional way, but there are many, many more cases of peopkle who DID go to college and work up that way.