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Stock Options for Accounting Purposes Index By Title

Stock Options for Executive Compensation Index By Title

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

( Symbol Guide )

[ A ]

An Early Advocate of Stock Options Debunks Himself, Claudia H. Deutsch, The New York Times , April 3, 2005.  “Fifteen years ago, Michael C. Jensen, a professor at the Harvard Business School, wrote a paper with Kevin J. Murphy, then a professor at the University of Rochester, that trumpeted some pretty radical ideas for the time. Compensation systems, they posited, prompted chief executives to add revenue, not to increase profit, pay dividends or otherwise reward long-suffering shareholders. Their suggestion was to make stock options a big component of top management's pay, ensuring that they do well only if shareholders do well. "It seemed a way to tie managers tighter to the mast," Professor Jensen recalled recently.  Of course, it turned out to be anything but. In far too many cases, stock options tempted managers to pick strategies, schedule deals and investments, even juggle the numbers, so that the company looked best when it came time to exercise those options." (Stock Options (Accounting and Executive Compensation))

Are Options Seducing Directors, Too?, Gretchen Morgenson, The New York Times, December 12, 2004.  “Trying to extricate company directors from their chief executives' pockets has been at the heart of many changes in corporate governance during these dizzying scandal years. Indeed, the most commonly cited cure-all for what ails corporate America is director independence.  But all the independent directors in the world cannot seem to fix perhaps the biggest problem facing shareholders: egregiously high and ever-rising executive pay. Even though members of companies' compensation committees now must be independent, executive pay just keeps on rocketing.  A new study by academics at Baruch College, part of the City University of New York, offers a possible explanation of why this may be. You may not be shocked to learn that - once again - it's about money."  (Corporate Governance (Outside Directors & Executive Compensation))

 [ B ]

 [ C ]

 [ D ]

Dell Joins Wave of Companies Seeking to Soften Options Hit, Gary MacWilliams, The Wall Street Journal, June 23, 2003.  “Companies don't yet have to record their employee stock options as expenses, but a number of large companies quietly are taking steps to lessen the impact on their bottom lines.  For fast-growing companies that issue lots of options, such as Dell Computer Corp., Genentech Inc. and Oracle Corp., a requirement forcing them to treat options as expenses would have turned their profits into losses for recent years.”  (Stock Options | Accounting | Equity Dilution | Expensing Options)

 [ E ]

Even Last Year, Option Spigot Was Wide Open, Stephanie Strom, The New York Times, February 3, 2002.  "SURPRISE, surprise.  Early reports suggest that top executives across America got bigger dollop of stock options last year as part of their pay.  As corporate earnings and cash flow have ebbed and stock prices have fallen, boards have been doling out options as a cheap, balance-sheet-friendly way of compensating managers."  (Stock Options | Executive Compensation | Equity Dilution)

 [ F ]

Fed Chairman Stays Firm on Idea that Options Should be Expensed, Alan Murray, The Wall Street Journal, April 9, 2002.  "Alan Greenspan may be the most respected figure in Washington, but eyes roll and heads shake when the Federal Reserve chairman talks about the need to count stock options as a corporate expense. And he won't stop talking about it. The political calculus here is clear. The tech companies have taken the lead in lobbying against expensing options, for the simple reason that they have the most to lose. They use options instead of cash to pay bills, and their earnings would get clobbered if they were forced to treat those options as cash."  (Stock Options | Accounting | Equity Dilution | Expensing Options)

Five More Companies Show Questionable Options Pattern, Charles Forelle and James Bandler, The Wall Street Journal, May 22, 2006.  “In 2001, KLA-Tencor Corp., a leading semiconductor-equipment maker, granted its top executives, including Chairman Ken Levy, two batches of stock options. They arrived on unusually fortunate days for the executives: The first dated at the share price's first-half low; the second at its second-half low.  In all, Mr. Levy received 10 grants from KLA-Tencor and its predecessor company between 1994 and 2001 -- all preceding quick runups in the share price; an analysis by The Wall Street Journal found the probability that that pattern occurred merely by chance is tiny -- around one in 20 million.  Mr. Levy and company executives didn't return repeated phone and email messages.”  (Executive Compensation (Stock Options))

 [ G ]

 [ H ]

How to Forget the Footnotes, Justin Fox, Fortune, Monday, July 23, 2002.  "Outside of the Silicon Valley true believers, and their friends in Washington, it's getting ever harder to find people who are willing to argue that employee stock options are in fact free, as current accounting practice says they are. But there are still lots of arguments over how best to measure the cost of options. Here's a cheat sheet to the most prominent alternatives."  (Stock Options | Accounting | Equity Dilution | Expensing Options)

 [ I ]

 [ J ]

 [ K ]

 [ L ]

 [ M ]

 [ N ]

 [ O ]

Only Option (For Stock Options, That Is), Justin Fox, Fortune, August 12, 2002.  "But as Washington self-righteously scrambles to right the wrongs of corporate America, let's not forget that the illicit book-cooking revealed so far at Enron, WorldCom, and others was trifling compared with the entirely legal book-cooking that most of corporate America engages in: lavishing stock options on top executives and not deducting them as expenses. It is, without a doubt, the mother of all accounting abuses."  (Stock Options | Accounting | Equity Dilution | Expensing Options)

Option Absurdity: Hoping for Lower Prices, Floyd Norris, The New York Times, March 15, 2002.  “As investors worry about what the Securities and Exchange Commission will find in its investigations of accounting at Qwest Communications and WorldCom, perhaps the strangest part of the whole affair is that many employees at both companies have reason to hope that their share prices fall further.  It may sound crazy that companies align the interests of their employees with those of the short sellers. But such are the lengths that companies are going to these days to preserve the accounting fiction that options can be handed out at no cost to the company.  Employees of both companies were offered the opportunity to cancel their old, hopelessly out-of-the-money stock options. In their place, they were offered an equal number of options — to be issued with an exercise price equal to the market price months from now.”  (Stock Options | Executive Compensation | Equity Dilution)

Options-Accounting Sideshow, Robert L. Bartley, The Wall Street Journal, July 29, 2002.  "The lodestar of whether corporate America has reformed itself, various sages tell us, is whether stock-option grants are charged against reported earnings. OK, I guess, but some of us remember FIFO and LIFO."  (Stock Options | Accounting | Equity Dilution | Expensing Options)

Option Math: Why So Many to So Few?, David Leonhardt, The New York Times, February 17, 2003.  “Among corporate executives, there are wealth spreaders and wealth hoarders.  The spreaders disperse millions of stock options among their employees, not just to top executives, allowing many to benefit when the company's stock rises. Spreaders remain very much in the minority, but their ranks include management at Walt Disney, many large technology companies like I.B.M. and Microsoft and drug makers like Johnson & Johnson.”  (Stock Options | Executive Compensation | Equity Dilution)

 [ P ]

Perfect Payday, Charles Forelle and James Bandler, The Wall Street Journal, March 18, 2006.  “On a summer day in 2002, shares of Affiliated Computer Services Inc. sank to their lowest level in a year. Oddly, that was good news for Chief Executive Jeffrey Rich.  His annual grant of stock options was dated that day, entitling him to buy stock at that price for years. Had they been dated a week later, when the stock was 27% higher, they'd have been far less rewarding. It was the same through much of Mr. Rich's tenure: In a striking pattern, all six of his stock-option grants from 1995 to 2002 were dated just before a rise in the stock price, often at the bottom of a steep drop.  (Executive Compensation | Stock Options)  How the Journal Analyzed Stock-Option Grants, Charles Forelle, The Wall Street Journal, March 18, 2006.  Buy Low

 [ Q ]

 [ R ]

 [ S ]

Stock-Option Accounting Hides In the Shadows of the Financials, Tracy Byrnes, The New York Times, March 22, 2002.  “Since financial transparency is all the rage these days, it's no surprise that stock option reporting -- or lack thereof -- is back on the front pages.  And, along with the headlines, the issue of stock options reporting is back on the Hill. About a month ago, Senator Carl Levin (D., Mich.), with co-sponsorship by John McCain (R., Ariz.), introduced a bill requiring transparent reporting in this post-Enron world. Part of their plea is to force companies to include employee stock option expenses in their earnings.”  (Stock Options | Accounting | Equity Dilution | Expensing Options)

Stock Options and Related Matters, Chairman Alan Greenspan, 2002 Financial Markets Conference of the Federal Reserve Bank of Atlanta, Sea Island, Georgia, May 3, 2002.  "But the very complexity and dynamism of our system requires that we constantly evaluate the tools employed for measuring corporate performance to ensure that they adapt appropriately to the evolving financial and economic environment. In that regard, the increasing use of stock option grants to employees has raised new challenges for our accounting system. Such options are important to the venture capital industry, and many in high-tech industries have counseled against making any changes to current practices. They argue that the use of options is an exceptionally valuable compensation mechanism; that recognizing an expense associated with these grants would reduce the use of options, harming high-tech companies; that the effect of options on fully diluted earnings per share is already recognized; and that we cannot measure the costs of options with sufficient accuracy to justify their recognition on financial statements."  (Stock Options | Accounting | Equity Dilution | Expensing Options)

Stock Options And The Lying Liars Who Don't Want to Expense Them, Clifford S. Asness, Financial Analysts Journal, Volume 60 - Number 4, 2004.  “Why this essay when the arguments in favor of expensing options are so clearcut and obvious? Well, the forces of logic and sense have yet to win.1 For instance, many days still bring an editorial in the Wall Street Journal or an interview on cable news with a technology stock executive, a NASDAQ chieftain, or a politician on why options should remain unexpensed. Because this collection of pundits does not mind repeating falsehoods, I believe another article is called for that repeats the truth." (Stock Options | Accounting | Equity Dilution | Expensing Options) Classic

Stock Options Come Under Fire in the Wake of Enron's Collapse, Greg Hitt and Jacob M. Schlesinger, The Wall Street Journal, March 26, 2002.  "Supporters of stock options say they give employees a financial stake in their companies' success, which ultimately benefits all shareholders. The options give employees the right to buy a company's stock, in the future, at today's price. Their opponents say stock options have bred a culture of irresponsible greed, showering executives with outlandish paydays that sometimes reach into the tens and hundreds of millions of dollars.  vs. Last month, when he introduced a bill to rein in the benefits of options, Sen. Carl Levin, a Michigan Democrat, described the cycle this way: Most executive pay packages rely on heavily on options, he said, encouraging corporate managers to push accounting rules "to the limit," in order to make their financial statement look better, so their stock prices will go up, "so that executives can cash in their options."  (Stock Options | Executive Compensation | Equity Dilution)

Stock Options: Do They Make Bosses Cheat?, Floyd Norris, The New York Times, August 5, 2005.  “Question for shareholders: If the company's directors give lots of options to the chief executive, should you be happy or nervous?  The traditional answer from academia was that big options grants were good. They aligned the interests of executives with shareholders, and they helped to offset the tendency of executives to avoid risky but potentially profitable investments.  But it turns out that the conclusions were based more on optimistic theories than data. Now, with option grants having become the largest portion of chief executive compensation - worth more than either salary or bonus for the average boss - analysis of data on corporate performance provides some disturbing results." (Stock Options | Executive Compensation | Equity Dilution)

Stock Option Madness, Robert J. Samuelson, The Washington Post, January 30, 2002.  “Given the huge rewards, it would have been astonishing if Enron's managers had not become obsessed with the company's stock price and -- to the extent possible -- tried to influence it.”  (Stock Options | Executive Compensation | Equity Dilution)

Stock Options Said Not to Be as Widespread as Backers Say, David Leonhardt, The New York Times, July 18, 2002.  “Campaigning against legislation that would force companies to account for the cost of stock options, corporate executives, lobbyists and sympathetic lawmakers have proclaimed options to be a pillar of the middle class.   In reality, however, the defenders appear to have greatly exaggerated the spread of options.   ” (Stock Options | Executive Compensation | Equity Dilution)

Study Finds Backdating of Options Widespread, Stephanie Saul, The New York Times, July 17, 2006.  “More than 2,000 companies appear to have used backdated stock options to sweeten their top executives’ pay packages, according to a new study that suggests the practice is far more widespread than previously disclosed.  The new statistical analysis, which comes amid a broadening federal inquiry of the practice of timing options to the stock market, estimates that 29.2 percent of companies have used backdated options and 13.6 percent of options granted to top executives from 1996 to 2005 were backdated or otherwise manipulated.”  (Stock Options (Backdating))

 [ T ]

These Stock Options Just Didn't Add Up, Gretchen Morgenson, The New York Times, January 30, 2005.  “Top executives on the receiving end of munificent pay packages like to argue that their troughs full of stock options have no relationship to the improprieties that keep erupting across corporate America.  But an episode last week involving Brocade Communications, a San Jose, Calif., company that makes switches for computer storage networks, suggests that every now and again there just might be a connection after all.” (Stock Options | Executive Compensation | Equity Dilution)

Time for Accountability at the Corporate Candy Store, Gretchen Morgenson, The New York Times, March 31, 2002.  "Out-of-control stock option grants at companies across America are at last prompting action among shareholders."   (Stock Options | Accounting | Equity Dilution | Expensing Options)

Two, Three, Many?, Paul Krugman, The New York Times, January 31, 2002.  “Here’s a scary question: How many Enrons are out there?  One answer is that a high stock price helps a company grow; it makes it easier to raise money, to acquire other companies, to attract employees and so on."  (Stock Options | Executive Compensation | Equity Dilution)

 [ U ]

 [ V ]

 [ W ]

Wall Street Turns Blind Eye to Results Of Option Expensing, Diya Gullapalli, The Wall Street Journal, July 12, 2005.  “Most followers of finance know companies must now treat stock options as an expense. Much of Wall Street must have skipped class the day that lesson was taught.  Last month, accounting rules kicked in requiring public companies to treat stock options like any other compensation cost, similarly nicking net income. The first batch of companies subject to the new rules will put out full-year results shortly, while others have until next year to reflect the change." (Stock Options | Accounting | Equity Dilution | Expensing Options)

When Options Rise to Top, Guess Who Pays, Gretchen Morgenson, The New York Times, November 11, 2002. “By proposing last week to make companies deduct the cost of stock options as they would any employee cost, the International Accounting Standards Board may finally be moving the corporate world closer to uniform treatment of this wildly popular and decidedly American form of executive pay. But the debate is not about to stop.  The board's move, which would make corporate accounting for stock options reflect reality, is already drawing fire from technology company executives and their lobbyists who favor keeping option costs out of corporate profit-and-loss statements. Proponents of the status quo argue that if options must be reported as expenses, companies will no longer dispense them.”  (Stock Options | Accounting | Equity Dilution | Expensing Options)

 [ X ]

 [ Y ]

 [ Z ]

Symbol Guide

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