— The Indepundit believes limiting stock options is necessary to restoring investor faith in the markets, so let me amplify on remarks below.
He’s right that creative accounting is partially to blame for investor worries about the market, but other factors are investment banker/stock broker conflicts of interest and lax investigative reporting by the business press, especially the tech press. Investors realize that the market is an insider’s game, and cosmetic changes in accounting regulations aren’t going to repair that fundamentally sound perception.
Stock options are tangential to all of this. Executive stock options are necessary since Congress enacted tax codes that require all executive compensation above $1M/yr to be double-taxed, once by the exec and again by the company, since they’re forbidden from writing it off as a business expense.
Stock options for tech workers are an essential element of compensation for engineers taking the risk of joining startups, and startups are key to the tech leadership the US enjoys over other countries. Let’s not throw the baby out with the bath water.
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