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Article: New rule hits exec pay: Expensing stock options has companies studying what they can afford.
- Article from:
- The Dallas Morning News (Dallas, TX)
- Article date:
- May 7, 2006
CopyrightCOPYRIGHT 2006 The Dallas Morning News. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Pamela Yip
May 7--The Financial Accounting Standards Board's rule on expensing stock options went into effect in 2005, and it's changing the way top executives are compensated.
"We think people will start to diversify out of options," said Chris Crawford, managing director at Longnecker & Associates in Houston, an executive compensation consulting firm. "Now that we've got an expense, companies are making a judgment in terms of what they can afford from an earnings charge."
In the past, companies had to report the potential cost of stock options to executives only in footnotes to financial statements.
But the FASB said the cost ...