Sunday, July 21, 2002

John Judis points out that current practices allow companies to hide the effect of stock options on profits while at the same time allowing companies to take a tax deduction for them. This is not bad corporate practice, it's bad law. If you can deduct an expense you had better be required to reflect the expense in the P&L. Valuing stock options is tricky but this balanced approach should restrict wild exaggerations of value.

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