Should Companies Expense Stock Options?

A reader writes : "The New York Times is running a story about proposed accounting changes to force companies to expense stock options. Is this a necessary and proper oversight measure to enforce financial discipline on companies that might otherwise have none? Or would this measure basically stop companies from offering fiduciary responsibility incentives to their employees? What do you think about this? What should the final decision be? And what measures should be taken to influence the decision-making process?"

Comments

No; was: a weak Yes

[TastyWords]

It prevents insider training.

That's nice. Fiat. The sky is purple. Why? Because I say so. No proof. Just based upon what I say. Would you prefer a prettier word than fiat? Try ukase. It's got a lot more umph in it than fiat (it can only be invoked by a Russian tsar) but it also doesn't require proof.

So we sit here watching your post. Care to explain what you meant? How about some proof? And please, don't tell us this is something in a magazine, or heard on a financial radio/tv show, and it's the only thing you can remember. That's worse than fiat.

Re:That's a stupid question.

[benzapp]

Ah, thank you Jew.

We aren't talking about stocks you fucking moron. We are talking about stock options. I am amazed at the idiocy here.

What you, and another poster seem to believe, is stock options when issued, are immediately treated like stock and are counted as outstanding shares. THIS IS NOT TRUE.

The point that I am getting to is the company buys stocks to cover the profit realized by the optionee. THe money doesn't magically appear, it came out of the company's profits.

Do you really think the people at FASB are as stupid as you are? Think!