To the guardians of accounting principles, the best cure for wanton stock options grants, which made billions of dollars for insiders before the market came crashing down, is to expense them. Under pressure from politicians, Warren Buffett and the Financial Accounting Standards Board, companies ranging from General Electric to Coca-Cola have taken the pledge this year and started deducting the value of grants from net income. Honesty hurts the bottom line: A Towers Perrin study says that the deductions cut net income on average by 10%.
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