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Another angle.

 
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This article in Washington Times provides different angle on cost of software development in US.
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The real advantage that overseas competitors may have against their U.S. counterparts in the tech sector, however, is the cost of top management. In the United States, this can run into the billions, even the billions per person. John Chambers, for example, not the founder of Cisco but a professional manager brought into the company in the early 1990s, cashed in $38 million worth of stock options Friday, but this still left him with options worth $363 million at today's prices, all of which he has received since 2001. In total Cisco's stock option plan has issued 321 million shares, with a total value of $7 billion -- considerably more money than the total earnings of the company since its formation. Except for social security tax, of course, none of this money has been reflected in Cisco's income statement, only in its balance sheet, where the company is buying back shares at a frantic rate -- more than $7.8 billion of scarce cash has been spent on share buybacks since 2001, in years of a tech downturn.
Cisco, paying out 100 percent of its profits to executives through share options, is exceptional (though there are companies such as eBay that pay more.) However, many tech companies pay out 30-50 percent of their profits, when the math is done properly. At this level, top management remuneration is not just significant, it may be the largest single element in the company's costs, an element that is almost wholly out of control while that management remains in the U.S., with remuneration standards as they have been since 1995.
The short-sighted greed of U.S. tech management, and the foolishness of a regulatory system that has allowed them to hide the true costs of their overpayment, will bear true responsibility for this development.

Link to that article:
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What do you think?
--Alex Ayzin
[ January 20, 2004: Message edited by: Alex Ayzin ]
 
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stock options don't go on the balance sheet, so it's the foolishness of a regulatory system.
And it's right, the true costs are hidden.
 
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