When bulls stampeded down Wall Street, few investors cared how companies accounted for stock options. Chris Waldorf, a veteran financial analyst with Deloitte & Touche, was an exception. In the footnotes of an annual report of a company in which he had a small stake, Waldorf noticed the cost of that year's stock options came to half of net income. Yet none of it was charged against profit. "The footnote seemed so erudite and high-minded," he said. "But they were hiding something. I was extremely annoyed." That was in 1999. Now, after the Enron affair and the nonstop orgy of options for so many U. S. executives, Waldorf feels even more keenly the sting of the smug reply he got when he wrote to complain. So he is pushing a two-step plan to clean up the options mess which, to him, amounts to so much "looting." His aim: to ensure an exec only gets paid when his company's stock does better than an equity investor might reasonably expect. As a member of the Association for Investment Management & Research's accounting policy panel, Waldorf is in a good position to help focus future debate over options.
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