It's hard to understand how a company that has led the world into the computer age can be run by managers who stick their fingers in their ears, squeeze their eyes shut, and chant "Nah nah nah nah!" when the firm's real owners ask them to clean up their accounting.
But that's exactly what happened yesterday when Intel's
Before the vote, they had urged shareholders to reject it. CFO Andy Bryant called the vote "wrong" and reiterated his opposition. For his part, CEO Craig Barrett told a crowd that expensing options would make Intel's financial statements less accurate.
When I embarked upon this modest essay, I really, really wanted to steal a line from Dave Barry, which then would have compared Barrett, somewhat unfavorably, to a specific kind of weasel.
Barrett has continued with the same puddle-deep arguments that Intel has been rolling out since the '90s, trying to scare investors, lawmakers, and the public with an endless stream of misrepresentations about the "danger" of expensing options. In addition to the usual spurious threats of impaired job growth, last month he upped the rhetoric to invoke the threat of Red China and, even scarier -- pull the blankets over your head, kids -- the trial lawyers!
Expensing options will lead to less accurate accounting? Fools, options are not subject to Heisenberg's Uncertainty Principle. My colleagues have explained again and again. and again how the mere act of measuring something does not make it any bigger.
Options have real costs. Barrett wants to keep those costs buried in the footnotes rather than accounted for on the income statement, where it matters. Is that because Intel distributed nearly $1 billion worth of options last year, or is it that Barrett himself collected $14 million in options? I leave it to you to decide if this behavior qualifies as weasel-like.
See what your fellow Fools think of options on our Intel discussion board.