Apple to amend options for employees

The Mercury News reports that Apple is offering to give employees cash instead of previously-granted stock options in order to avoid tax-related penalties for those employees affected by backdated stock options. As you might recall, Apple recently came under a cloud for backdating their stock options to lower their value. At least with cash, employees will be able to record exactly the amount received rather than their perceived worth.

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Source: http://www.mercurynews.com/breakingnews/ci_5453641

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The Mercury News reports that Apple is offering to give employees cash instead of previously-granted stock options in order to avoid...

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robinharris

Reg,

I must differ with you. The FASB standards for accounting for "in the money" options have been clear for many years: the value of the option must be accounted as an expense.

An "in the money" option is one that is priced below the market value of the stock when it is issued. The scandal is that so many corporate officers issued such options and then lied in SEC reports to cover it up to protect their earnings.

This is a different controversy from the one about accounting for normal stock options that are worthless when issued.

March 17 2007 at 8:05 PM Report abuse Permalink rate up rate down Reply

R Muffet

It should be pointed out that this "under a cloud" thing isn't specific to Apple. Half the companies in the valley have run afoul of the SEC's unclear guidelines on how to account for options.

It's really tiresome for these companies, and the shareholders & commentators baying for executives' blood are somewhat ironic, as many companies use options to attract the best employees and thus increase shareholder value.

March 17 2007 at 7:53 PM Report abuse Permalink rate up rate down Reply