Nice article for discussion of stock options
A recent USA TODAY article provides a nice way to lead into the discussion of expensing of stock options. We cover the issue of stock option compensation in chapter 18 of our text. One item of interest is:
Massive charges. The change is still causing some major earnings turbulence. Merrill Lynch this week said it would expense $1.2 billion for stock options in the first quarter, vs. the $350 million previously expected. Richard Wagner, president of Strategic Compensation Research Associates, says the magnitude of that is staggering. He says accounting watchdogs eliminated a technicality Merrill had been using to delay having to expense options. Rather than taking a hit to earnings over several years, Merrill took it all in the first quarter.
Massive charges. The change is still causing some major earnings turbulence. Merrill Lynch this week said it would expense $1.2 billion for stock options in the first quarter, vs. the $350 million previously expected. Richard Wagner, president of Strategic Compensation Research Associates, says the magnitude of that is staggering. He says accounting watchdogs eliminated a technicality Merrill had been using to delay having to expense options. Rather than taking a hit to earnings over several years, Merrill took it all in the first quarter.
posted by Don Pagach at 9:43 AM
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