Option Expensing: A Quick Hit Survey by WorldatWork
As the list of major companies
voluntarily moving toward the expensing of employee stock options begins to
grow longer, WorldatWork surveyed 504 members during the week of July 15, 2002
to gauge the opinions of professionals that administer stock option plans at
a time when many companies are making news with such an accounting switch.
According to the survey,
many companies have not made up their minds about what they might do should
legislation or regulation mandate the expensing of employee stock options. While
the vast majority of respondents said it is too early to say what they might
do, 10 percent said they would likely offer smaller stock option grants, 9 percent
said they would probably move to more performance-based options and 8 percent
said they would discontinue the practice of offering stock options to employees
below the executive ranks. When asked about how they might offset the reduced
use of options because of legislation or regulation requiring expensing, 46
percent said they would increase the use of variable pay programs. Twenty-three
percent said they would not offset with other rewards programs.
indicate whether your organization is:
academic, or not-for-profit (please discontinue the survey)
your organization have a stock option program?
stock option program
stock option program
The following questions
responses are based on the 71% of respondents indicating they do have a stock
option program in place in their organization.
indicate which of the following groups of employees in your organization
are eligible to receive stock option grants.
and executives only
but not all employees (i.e., management and above)
employees are eligible for program ("broad-based")
all stock option plans offered to employees in your organization approved
by shareholders, or does your organization grant stock options without shareholder
all stock options are approved by shareholders
stock options are approved by shareholders
recently announced that it would begin to account for employee stock options
as an expense. Where is your company regarding this subject?
using non-expense accounting and waiting to see if a change in stock option
accounting is forced by legislation or regulation
using FAS 123 accounting with Black-Scholes
using FAS 123 accounting without Black-Scholes
researching/studying potential changes to stock option accounting
to implement a change to adopt FAS 123 including Black-Scholes accounting
method for stock options
to implement a change to adopt FAS 123 using a method other than Black-Scholes
accounting method for stock options
legislation or regulatory action in the near future requires companies to
expense employee stock options, what effect will this have on your company's
practice of granting of stock options? (check all that apply)
would discontinue providing stock options to employees below the highest/executive
would no longer provide stock options to any employees
would shift to more performance-based stock options
would offer smaller stock option grants
would make stock option grants more infrequently
is too early to determine what our company will do
would not change our current practices
percent of your company's stock is currently held in employee options?
your organization were to begin expensing stock options, what other forms
of rewards would you most likely increase usage of? (check all that apply)
not offset with other rewards
not anticipate changing how options are expensed
it occurs through a change to law, regulation or voluntary corporate movement,
do you believe expense accounting for stock options will become a common
practice by U.S. companies by the end of 2002?