May 26, 2005
I believe the most pressing issue to get resolution to is the expensing of stock options. It is endangering our whole competiveness of the high tech industry. It is at the root of motiveation and compensation for ALL EMPLOYEES in this sector, not just the top management.
As most of us realize that all models suggested by FASB are flawed because they do not represent the fair value of employee stock options. Cisco is in the process of trying to demonstrate that and many of us would like to do the same but do not have a investment banker interested in business at this level. The sale of Cisco options will prove how far off FASB models are and then we can come up with some meaningful models for Employee options. Yes they are an expense, but no one will pay the value that is getting generated and put into the P&Ls.......A option can not be worth as much as the stock becasue you still have to pay the stock price to excercise the option. Employees options are non-tradable, vesting and at risk with employment.
I hope you will consider accelerating this approval of the Cisco sale and delaying the 123R requirements until these options are field tested.