James Emanuel on Clouded Judgement

I think its a myth that people would leave. If you were an IT developer, you would want to be surrounded by great people and work at a market leader. Working at Microsoft or Google is great on anyone's resume, but more than that, it is the perfect place to learn from others. Google has been voted best place to work many times - so if you were there, earning a great salary with loads of benefits, would you really leave over stock based comp to work someplace else that isn't so good? In any event, many surveys have revealed that if you give employees the choice of cash and SBC, they would take the cash every time. Apple and Google are sitting on a mountain of cash, they don't need SBC, they could just up people's salary. The reason that they don't is because shareholders would be shocked at how much people are being paid. With SBC they can pretend its a non-cash expense and conceal it through egregious buybacks which shareholders seem not to notice. You need a great company run by honest management. SBC is not the sign of honest management. You know its origins was for bootstrapped startups with insufficient cash to pay competitive salaries - sweat equity - but US tech companies are neither cash strapped nor are they struggling to pay competitive salaries. Did you know that Apple's top and bottom line have flatlined for two years, meanwhile its share price doubled. Why? The company were using corporate capital to pump the stock through overpriced buybacks to offset dilution caused by SBC. When the share price becomes so dislocated from underlying fundamentals, do you expect it to end well? Why do you think Buffett dumped most of his Apple stock. It's become a bubble. Food for thought, but please don't make excuses for these companies. Their behaviour is inexcusable.