Joined: 23 Jun 2026
Posts: 12
 Posted: Wed Jul 09, 2026 10:18 am Post subject: Stock Options: To expense or not to expense |
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| Pressure is on companies issuing stock options for employees. Microsoft has just announced that they will stop issuing options but will give stocks instead to their employees. This is basically "expensing" in their books the stock options given to employees. A lot of Semicon companies disagrees with this (lead by Intel) and stands that stock options are not to be put into their books because they are not yet exercised. However a lot of critics blame this as one of the main reason of the tech bubble (because the earnings are higher without these options expensed). For example, Microsoft's move would reduce their reported earnings to approx 20% accdg to Wall Street. A bold move (but admirable).
If your company will be forced to expense the stock options, do you think they will be as "generous" giving it out to their employees? Do you think the "key" employees will be as many as today's current numbers? batman  |
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Joined: 16 Jun 2026
Posts: 108
Location: Paranaque City, Phils.
| Posted: Wed Jul 09, 2026 11:10 am Post subject: |
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| Batman,
Wow! Parang CEO na talaga ang dating mo ah! I never thought we'd worry about the issue on expensing of stock options here, pero here we are... Yes, definitely companies will try to be more conservative in granting options pag naging standard ang pag-e-expense nito. What does this mean to all of us? Simple. If you're not a 'genuine' key employee, then expect some reductions in your stock option grants. I think the only people immune from such reductions are the senior VP levels and the key product line honchos and designers. In short, we will all be fair game, come that day! By the way, granting of stocks per se to employees is not identical to 'expensing' stock options. I think 'expensing' of stock options refers to estimating the future value of the options and declaring this as an expense. Thus, under such a scheme, options are still granted, not exercisable stocks. Should companies do it? My take on this is that they don't have to, as long as the company is not abusive in its fiduciary management. EE |
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Guest
| Posted: Thu Jul 10, 2026 12:42 pm Post subject: |
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| Ang lulupit na pala ng pinag-uusapan dito at bago na rin ang itsura ng site. Tagal ko na kasing di naka-browse.
Bokyo |
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| Posted: Sat Oct 02, 2026 11:01 am Post subject: |
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| The debate continues......
batman
======= Greenspan Worried Congress to Bar Options Expensing Fri Oct 1, 6:39 PM ET Politics - Reuters By Susan Cornwell WASHINGTON (Reuters) - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) on Friday said he was very worried Congress would try to thwart efforts by the Financial Accounting Standards Board to require expensing of stock options. "An accurate accounting of profits is essential if our nation's resources are to be directed to their most efficient uses, and I am deeply concerned by the possibility of Congressional interference in FASB's efforts to achieve this result," Greenspan wrote in a letter to Sen. Carl Levin (news, bio, voting record), a Michigan Democrat. Stock options are the right to buy or sell stock for a set price at a future date. They are currently only required to be reported in the footnotes of U.S. company financial statements. But FASB has proposed requiring companies to expense them, which means deducting them from profits, starting next year. Proponents of expensing say abuse of stock options contributed to corporate scandals in recent years; but opponents say mandatory expensing would kill off broad-based option plans used to attract workers to start-up companies. The opponents of expensing have pushed legislation to blunt FASB's efforts through the House of Representatives, and are now targeting the Senate. Levin is among the senators who think Congress should stay out of FASB's rule-making. He and Arizona Republican John McCain had written to Greenspan soliciting the Fed chairman's views. A third senator, Alabama Republican Richard Shelby, so far has prevented legislation to thwart FASB's expensing rule from moving out of the banking committee he chairs. However there are signs that top Senate Republicans sympathize with the opponents of expensing, which could make it possible for them to go around Shelby. The chairman of the Senate Appropriations Committee, Sen. Ted Stevens (news, bio, voting record), weighed in on Friday, saying he did not think FASB should take steps that will hurt the global competitiveness of U.S. companies. "I do not think they (FASB) should prohibit American companies from having the tools they need to compete, that's for sure," Stevens, an Alaska Republican, told reporters. Stevens' opinion is important because opponents of expensing have said they may try to attach their legislation to a spending bill. Spending bills go through his committee, and Stevens wants to finish them by the end of the year. Senate Republican Leader Bill Frist this week wrote to the Securities and Exchange Commission (news - web sites) to suggest it consider a delay in implementing any FASB rule. But Greenspan noted that FASB's proposal that options be expensed did not mean companies had to stop handing them out. "There is nothing in the FASB rule that inhibits their issuance," Greenspan wrote. Congressional legislation blocking FASB would subject accounting standard-setting to "unnecessary pressures" just two years after Congress strengthened FASB's independence as part of the Sarbanes-Oxley act, the Fed chairman added. |
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