King Rat (gkr) wrote,
King Rat
gkr

Stock options

Well, this is good news. Amazon.com announced yesterday that it would start to treat stock options granted to executives and employees as an expense. A number of companies, most notably Coca-Cola and The Washington Post Group, have announced that they will be taking this step. Warren Buffett is a major proponent of this measure and he owns large stakes in Coca-Cola and the Washington Post. But up until now, no major tech company has done this. Since tech companies rely on stock options to compensate employees to a much greater extent than traditional companies, they have argued the most vehemently against expensing stock options. Hopefully, other tech companies, including Expedia, will take this step as well.

I don't think it will take care of any of the accounting problems currently plaguing Wall Street, but it will make financial statements a bit more reflective of the underlying health of the companies that make them.

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