Employee Stock Options - NQSOs & ISOs Message Board

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

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To: Don Lloyd who wrote (707)	9/18/2004 5:46:40 PM
From: hueyone	of 786

<<How does this improve comparability between companies?>> It's all relative Don. The system with the least amount of comparability between companies is the system that is in place right now --- whereby two companies can be performing exactly the same, but one company reports great profits because they compensate employees in stock options which do not have to be reported on the income statement as an expense, while the second company reports negative profits because it pays an equivalent compensation amount to employees in cash which does have to be reported on the income statement as an expense. These two equivalent companies can even keep the same amount of shares outstanding if the first company that issues stock options repurchases shares equal to the stock options that are exercised. Imo, the current FASB proposal is a vast improvement over the current system which has a no expense reporting loophole which many tech companies have been merrily exploiting all the way to the bank to maximize insider incomes. JMHO, Huey

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