WORRIES OVER DILUTION, NOT EXPENSING, DRIVING OPTIONS SCALEBACKS: Despite a booming stock market, three-quarters of Standard & Poor’s 500 companies surveyed said that they are planning to shift away from stock options, but not as a result of expensing, according to a survey by Deloitte & Touche — rather, they’re running out of shares for option grants.

Two-thirds (67 percent) of the 165 companies in the Deloitte survey indicated that they would run out of shares within 24 months. As a result, companies will need to get investor approval to issue more shares this spring when most businesses hold their annual meetings, or at the same time next year. However, Deloitte noted that leading institutional investors, such as Vanguard and TIAA-CREF, are increasingly voting against company proposals to issue shares for long-term compensation plans because of stock dilution concerns.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access