{"id":837,"date":"2002-07-25T04:43:29","date_gmt":"2002-07-25T11:43:29","guid":{"rendered":"http:\/\/mossback.org\/archives\/2002\/07\/managing-earnings-by-accounting-for-options\/"},"modified":"2002-07-25T04:43:29","modified_gmt":"2002-07-25T11:43:29","slug":"managing-earnings-by-accounting-for-options","status":"publish","type":"post","link":"https:\/\/bennett.com\/blog\/2002\/07\/25\/managing-earnings-by-accounting-for-options\/","title":{"rendered":"Managing earnings by accounting for options"},"content":{"rendered":"

\t\t\t\t— More Than Zero<\/a> explores some of the implications of expensing stock options:<\/p>\n

Another amazing facet of the public debate on this topic is that no pundit I’ve seen has considered what happens after the options have been expensed and they expire (as they sometimes do). Let’s imagine we have expensed $25 million of options and given them to our CEO. The option term has expired, the options were worthless. Now we get to take the expense back (the books don’t balance if you don’t!). Companies could have a lot of fun with that by issuing a series of complex, long-dated deep out-of-the money options with impossible employment contingencies in order to create a reserve during flush times. Talk about managed earnings! <\/p><\/blockquote>\n

So expensing options creates the opportunity for more shenanigans than it forestalls. Sticking to real expenses and real earnings is the best route, no matter what Jimmy Warren Buffett has to say about it.\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"

— More Than Zero explores some of the implications of expensing stock options: Another amazing facet of the public debate on this topic is that no pundit I’ve seen has considered what happens after the options have been expensed and they expire (as they sometimes do). Let’s imagine we have expensed $25 million of options … Continue reading “Managing earnings by accounting for options”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[16],"tags":[],"class_list":["post-837","post","type-post","status-publish","format-standard","hentry","category-politics"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbifyw-dv","_links":{"self":[{"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/posts\/837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/comments?post=837"}],"version-history":[{"count":0,"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/posts\/837\/revisions"}],"wp:attachment":[{"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/media?parent=837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/categories?post=837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bennett.com\/blog\/wp-json\/wp\/v2\/tags?post=837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}