More than 900 companies have used accelerated vesting schedules to avoid an estimated $8 billion in option expense costs, according to a Bear Stearns report released in late August.Beginning with their 2006 fiscal year, companies will be required to subtract the cost of stock options from profits as employees attain the right to cash in their options, a process known as "vesting" that normally stretches over four years. Since Bear Stearns released a report in January, more than 150 companies have accelerated their options vesting - essentially wiping the options off the books before the new accounting rule goes into effect.
The report said that companies are typically choosing to accelerate the vesting of "underwater" options, which are currently worthless, but still must be expensed.
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