Employee Stock Options - NQSOs & ISOs Message Board

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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs

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To: rkral who wrote (113)	6/22/2002 11:11:10 PM
From: Exacctnt	Read Replies (1) of 786

<<<Since you said "useful estimate", am I correct in assuming you would, of the two approaches, prefer the Black-Scholes approach?>>> If I had to choose one method over the other, I would prefer the Black Scholes approach. I do have to admit though, that I have not seen a real calculation of the Black Scholes in practice. Perhaps someone can provide a real company calculation that can be followed given the footnotes in the Form 10-K. Biomaven? An issue that I have a problem with concerning Black Scholes is that the cost is calculated at the grant date and doesn't change regardless of where the stock trades. In today's market, there are an enormous amount of options that are out-of-the-money and some may not be exercisable within the options remaining life. Also vesting is not considered. I wish there was data available to actually determine how much employee compensation, on a percentage basis, is deferred to options. In my opinion, the true cost of employee options should be the difference in cash compensation paid to employees working for a company with options and a company without. How to measure that to cover all companies would run into the same how to estimate problems.

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