Senators' stock options move could cost MS billions

The Register ^ | 14/02/2002 at 15:36 GMT | By John Lettice

[amigatec]

Well somebody told me I was stupid when I posted this before, but it appears MS has been losing money for years, and now thanks to Enron MS will have to refrain from "Creative Bookkeeping". Bush2000 you better cash in those Stock options before MS goes Belly up!!!!

And a related article can be found here

Senate bill could stymie stock options

[amigatec]

PING!!!!!!

I hope those of you with stock options read this. :-)

[Maedhros]

A simple solution: end wealth redisdribution and abolish the socialist income tax.

[PatrioticAmerican]

MS has $44+ Billion in revenue each year. They do not have more than $44+ Billion in expenses, so your FUD means nothing but hype.

[PatrioticAmerican]

What you said!

[Dominic Harr]

Um, this isn't about taxes . . .

This is about 'did MS really make a profit, or is that just creative book-keeping?'

[Almondjoy]

You need to read inbetween the lines a little bit more. Microsoft isn't losing money like you claim. What is happening here is that they are telling employee's to take a pay cut and paying them in company stock options which are already owned by the company but is not considered part of cash flows. Microsoft could have easily paid the lower salary without any stock options. The only thing this bill will cause is for companies to lower salaries nation wide for tech employees because they will no longer be able to remove stock value from their balance sheet.. or layoffs.. you pick and choose which you think might happen.

[lelio]

If you're interested in Bill Parish's thoughts check out his website.
And it isn't just MS, Cisco is another big player in the take your salary as options game.
The big draw for working at Microsoft was that it was pretty easy work (like most places 5% do the work while the other 95% are hangers-on) and the stock doubled every 1.5 years. Well it is at the same price it was 3.5 years ago. So instead of your options being near fully vested and worth 4.5x what they were when you got em you're 10k shares in '98 should be worth $2M are pretty much worthless.

[ken5050]

Much of MS's profit has come from writing puts against their own stock..they've made hundreds of millions over the years.....if the stock goes down, the liability has been estimated at 3-4 billion..

[Darth Reagan]

Well, if granting stock options were an actual cost to the company, I might agree with you. Instead, they are just called an "expense" for tax purposes...probably this allowance in the internal revenue code was intended to encourage corporations to grant options in order to make employees owners of the company. Not that I'd expect John McCain to understand that.

[Mixer]

Index and Bump

[RippleFire]

I agree. A sure indicator that there is too much taxation is when individuals and companies spend an inordinate amount of time trying to fiddle them.

[Robert_Paulson2]

yes... but... but... LINUX is evil. LINUX made him do it. LINUX has security faults that cost nothing to repair and does it without making bill gates rich. And to top it off it's all linux and other OS's fault. Don't forget to blame Sun too... and then there's the whole BSD thing.

Funny how the MS sychophant drones like to change the subject whenever their favorite "boy" gets a little bad press. RE... the LINUX sucks articles posted here regularly.

Meanwhile billy boy is practicing the same thing on cooking his books as he does when he steals and reverse engineers his heretofore would be competition, after cutting them some kind of "deal" wherein he gets access to their trust.

Faithless in little, means faithless in much. MS will go down, but not because of the evils of it's software monopoly... but probably because those evils are mirrored in their book cooking accounting structures.

Two sets of book used to be illegal.

[concerned about politics]

Sounds like NcVain is now looking for a tax increase. Someone tell this goon to shut the he!! up.
I hope this man loses his next political election!

[Argus]

Perfect - just as the NASDAQ is beginning to struggle out of the basement, the Senate rides to the rescue to crash it again.

[concerned about politics]

the Senate rides to the rescue to crash it again.

And McVain says he's a constitutionalist Republican. Liar! This guy reminds me of Clinton in so many ways.

[Dinsdale]

It's not just microlimp.

Damn near every tech company plays the same tricks; Cisco, Apple, Oracle, Sun...

[kezekiel]

News Flash: Corporations don't pay income tax. Landlords don't pay property tax. Taxes are just another line item in the expense column, and if they eat into profit margins, then prices go up.

That's why I love sales taxes, gas taxes, and sin taxes so much. Everybody *knows* that the government is getting a slice, and a tax increase means people will directly pay more for things they buy. No more of this baloney about corporations paying their "fair" share.

Finally, corporations may be "entities" for certain legal liability purposes, but they are *not* people. The people who *own* corporations are people, and they have to pay taxes on the earnings that the corporation distributes to them. This is the "double taxation" bind that owners of corporations go through. My dad taught me, growing up, that if you own a corporation, you do your best to show a break-even at the end of the year every year. Now that I'm all grown up, that's what I do with mine.

[ConsistentLibertarian]

"A simple solution: [...] abolish [...] income tax." But there's a way on, and Bush says we need cattle subsidies to fight it.

[ConsistentLibertarian]

On the plus side, you get to invest capital without personal liability (read: "responsibility"). Maybe you could work out a trade, offering to phase out corporate taxes while removing the shield of corporate personality that protects shareholders from liability? Conservatives would like the lower taxes and "personal responsibility" part of the proposal. (Well, maybe not the "personal responsibility" part, that might just be rhetoric.) And socialists would like the idea of being able to sue shareholders for every last cent they have when they invest in a corporation that pollutes, etc.