Re: [Nolug] Something that would never happen here

(To keep this somewhat on-topic, I'll mention Microsoft.)

"Brett D. Estrade" <estrabd@yahoo.com> writes:

> I don't buy that. Why do US corporations dominate the fortune 500
> if they are so short-sighted?

Because the Fortune 500 doesn't measure what you think it measures.

    Apparently, most management teams still don't get it. More than a
    year after the Enron debacle prompted calls for a change, an SEC
    analysis of Fortune 500 companies shows many of them still aren't
    imparting clear information to their investors in annual 10-K
    filings.

    (http://www.fool.com/news/take/2003/take030228.htm#SEC)

So, one could assume that a good percentage of the companies in the
Fortune 500 have inflated numbers. This includes Microsoft. (See?
On topic!)

    ... in this over hyped stock market where companies like
    Microsoft can post $10 billion in earnings and pay no federal
    income tax, in addition to not reflecting $15 billion in wage
    costs...

    (http://www.billparish.com/20010601willamette.html)

    Forget Windows 2000. As far as I can tell, the single most
    lucrative product Microsoft sells is its own stock. Microsoft
    receives almost as much cash inflow from the stock market as it
    does by selling goods and services.

    ... Microsoft got $3.1 billion of tax money back from the government,
    which at a 35% tax rate would be in exchange for a $9 billion tax
    expense it never had to pay. ...

    This is on top of a huge cash savings from substituting shares of
    its stock for actual cash paid to employees in the first
    place. Remember, Microsoft only made a $7.8 billion net profit
    [in 1999]. To pay its employees an extra $9 billion in cash
    compensation expense, it would go $1.2 billion into the red.

    (http://www.fool.com/portfolios/rulemaker/2000/rulemaker000217.htm)

Microsoft isn't alone in this short-sighted stock-option strategy,
either. And they're in the Fortune 500.

Mark.

(Its amazing how many "Linux Geeks" don't know how to trim replies!)

-- 
As long as you have mystery you have health; when you destroy mystery
you create morbidity.			     -- G.K. Chesterson
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