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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (60657)5/25/1999 6:42:00 PM
From: Freedom Fighter  Read Replies (2) of 132070
 
To Mike and all:

I recently wrote a letter to the B.L.S. about the employment cost index not including stock option compensation and how that may be influencing the figures. I got a response from them. It follows:

Thank you for your comments concerning the exclusion of stock option
benefits in the Employment Cost Index (ECI). As you noted, the ECI does not now include stock options in its measure of total compensation. However, we are currently evaluating the inclusion of these types of plans in the index. This fall we will be conducting a study of the incidence of stock options in the economy. Our goal in this study is to determine the prevalence of stock options plans across all types of occupations and industries.

The prevalence of stock options, as indicated by our test, will
determine our next step. If the prevalence is high enough, we will conduct additional tests to determine the magnitude of the cost of these plans and their impact on the ECI. The ECI measures change in employer costs of employee compensation; it does not measure the value of benefits to employees. As you noted, the costing of stock option plans is complicated. We plan to assess both the availability and feasibility of collecting the employer cost of stock options.

If the current prevalence of stock option plans does not justify the
resources needed to collect cost data; it is likely that we will continue to monitor the prevalence of these plans through our Employee Benefits Survey (EBS). The EBS tracks prevalence and plan provision data for a variety of benefits. When our studies are completed we will send you a copy of our findings.
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