While regulators, investors and governance experts applauded the Financial Accounting Standards Board’s decision to recommend that stock options be expensed, the reality is that it is much ado about nothing. Or, at the very least, it is another case of too little too late.
First of all, the same day FASB made its announcement, Towers Perrin trotted out a survey showing that investors don’t even care about the issue. Based on a study of 335 companies that have already begun expensing options, the firm found that a company’s decision to expense stock options has no impact on its stock price.
