Accounting for Options
Companies are now required to treat stock-option grants as a compensation expense. But more than 200 companies accelerated the vesting of options to avoid the expensing rule.
A new accounting rule that went into effect for most companies on January 1 requires that the cost of stock options be subtracted from earnings. That prompted a stampede of accelerated vesting, or bringing options granted before 2006 up to full value early.
The result: Over the next few years, earnings will appear higher than they would have otherwise.
Some companies say that's just good business sense -- like taking advantage of a tax deduction before it disappears. But watchdogs such as the Corporate Library say early vesting clouds the earnings picture and undermines the premise that stock options are meant to be a long-term incentive.
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Here's a list, provided by the Corporate Library, of companies that have fast-forwarded stock options.
COMPANY NAME | SYMBOL |
Acxiom Corporation | ACXM |
Adesa Inc. | KAR |
Administaff Inc. | ASF |
Advanced Energy Industries Inc. | AEIS |
Advanced Micro Devices Inc. | AMD |
Agere Systems Inc. | AGR |
AirTran Holdings Inc. | AAI |
AK Steel Holding Corp. | AKS |
Alcoa Inc. | AA |
Allergan Inc. | AGN |
Amerigroup Corp. | AGP |
AmerisourceBergen Corp. | ABC |
Amkor Technology Inc. | AMKR |
AmSouth BanCorp. | ASO |
Analog Devices Inc. | ADI |
Andrew Corp. | ANDW |
Andrx Corp. | ADRX |
Applera Corp. - Applied Biosystems | ABI |
Applera Corp. - Celera Genomics | CRA |
Applica Incorporated | APN |
Apria Healthcare Group Inc. | AHG |
Armor Holdings Inc. | AH |
Ashworth Inc. | ASHW |
Astoria Financial Corp. | AF |
Avaya Inc. | AV |
Avid Technology Inc. | AVID |
Avocent Corp. | AVCT |
Axcelis Technologies Inc. | ACLS |
Ball Corp. | BLL |
Bank of Hawaii Corp. | BOH |
BankUnited Financial Corp. | BKUNA |
BE Aerospace Inc. | BEAV |
Benchmark Electronics Inc. | BHE |
Big Lots Inc. | BLI |
Biogen Idec Inc. | BIIB |
BioLase Technology Inc. | BLTI |
(Table continues on next page.)
[page break]
Companies that have fast-forwarded stock options (page 2).
COMPANY NAME | SYMBOL |
BISYS Group Inc. (The) | BSG |
Black Box Corp. | BBOX |
Bombay Co. Inc. (The) | BBA |
Borland Software Corp. | BORL |
Boston Communications Group Inc. | BCGI |
Bowater Inc. | BOW |
BroadVision Inc. | BVSN |
Brocade Communications Systems Inc. | BRCD |
Brooks Automation Inc. | BRKS |
Buckeye Technologies Inc. | BKI |
CD Technologies Inc. | CHP |
Cabot Microelectronics Corp. | CCMP |
Cabot Oil Gas Corp. | COG |
Cambrex Corp. | CBM |
Captaris Inc. | CAPA |
Career Education Corp. | CECO |
Catalina Marketing Corp. | POS |
CBS Corp. | CBS |
Centene Corp. | CNC |
Central Freight Lines Inc. | CENF |
Chemed Corp. | CHE |
Ciena Corp. | CIEN |
Cincinnati Bell Inc. | CBB |
Circuit City Stores Inc. | CC |
Clarcor Inc. | CLC |
Comcast Corp. | CMCSA |
CommScope Inc. | CTV |
Community Health Systems Inc. | CYH |
Computer Task Group Inc. | CTG |
Connetics Corp. | CNCT |
Cooper Tire Rubber Co. | CTB |
Corinthian Colleges Inc. | COCO |
Corning Inc. | GLW |
Credence Systems Corp. | CMOS |
Cree Inc. | CREE |
Cross Country Healthcare Inc. | CCRN |
Cryolife Inc. | CRY |
CTS Corp. | CTS |
Cymer Inc. | CYMI |
Dana Corp. | DCN |
Datascope Corp. | DSCP |
Dell Inc. | DELL |
Dime Community Bancshares Inc. | DCOM |
Donaldson Co. Inc. | DCI |
Dow Jones Co. Inc. | DJ |
Dura Automotive Systems Inc. | DRRA |
Dycom Industries Inc. | DY |
Electro Scientific Industries Inc. | ESIO |
Enterasys Networks Inc. | ETS |
Entravision Communications Corp. | EVC |
Enzo Biochem Inc. | ENZ |
Epicor Software Corp. | EPIC |
EPIQ Systems Inc. | EPIQ |
Escala Group Inc. | ESCL |
Exabyte Corp. | EXBT.OB |
ExpressJet Holdings Inc. | XJT |
Fairchild Semiconductor International Inc. | FCS |
Family Dollar Stores Inc. | FDO |
(Table continues on next page.)
[page break]
Companies that have fast-forwarded stock options (page 3).
COMPANY NAME | SYMBOL |
FEI Co. | FEIC |
Fidelity Bankshares Inc. | FFFL |
First Data Corp. | FDC |
First Horizon National Corp. | FHN |
Flagstar Bancorp Inc. | FBC |
Flextronics International Ltd. | FLEX |
Footstar Inc. | FTSTQ.PK |
Fossil Inc. | FOSL |
Foundry Networks Inc. | FDRY |
Franklin Covey Co. | FC |
Frontier Airlines Inc. | FRNT |
Gamco Investors Inc. | GBL |
Gander Mountain Co. | GMTN |
Gannett Co. Inc. | GCI |
Gateway Inc. | GTW |
Gentex Corp. | GNTX |
Gentiva Health Services Inc. | GTIVTX |
Global Payments Inc. | GPN |
Goody's Family Clothing Inc. | GDYS |
Hanger Orthopedic Group Inc. | HGR |
Haverty Furniture Companies Inc. | HVT |
HCA Inc. | HCA |
Hewitt Associates Inc. | HEW |
Hillenbrand Industries Inc. | HB |
Hooper Holmes Inc. | HH |
Horace Mann Educators Corp. | HMN |
ICU Medical Inc. | ICUI |
IDT Corp. | IDT |
ImClone Systems Inc. | IMCL |
InFocus Corp. | INFS |
Ingersoll-Rand Co. Limited | IR |
International Paper Co. | IP |
International Rectifier Corp. | IRF |
Intersil Corp. | ISIL |
Inter-Tel Inc. | INTL |
Intevac Inc. | IVAC |
Irwin Financial Corp. | IFC |
ITT Educational Services Inc. | ESI |
IVAX Corp. | IVX |
Jabil Circuit Inc. | JBL |
Jack Henry Associates Inc. | JKHY |
JDA Software Group Inc. | JDAS |
JDS Uniphase Corp. | JDSU |
K2 Inc. | KTP |
Keane Inc. | KEA |
Keithley Instruments Inc. | KEI |
Kellwood Co. | KWD |
Knight-Ridder Inc. | KRI |
Korn/Ferry International | KFY |
Lattice Semiconductor Corp. | LSCC |
LeapFrog Enterprises Inc. | LF |
Learning Tree International Inc. | LTRE |
Libbey Inc. | LBY |
Linear Technology Corp. | LLTC |
LTX Corp. | LTXX |
Lucent Technologies Inc. | LU |
Magnetek Inc. | MAG |
(Table continues on next page.)
[page break]
Companies that have fast-forwarded stock options (page 4).
COMPANY NAME | SYMBOL |
Martek Biosciences Corp. | MATK |
MasTec Inc. | MTZ |
McKesson Corp. | MCK |
Mentor Corp. | MNT |
Mercury Computer Systems Inc. | MRCY |
Merit Medical Systems Inc. | MMSI |
Metro One Telecommunications Inc. | INFO |
MGI Pharma Inc. | MOGN |
Microchip Technology Inc. | MCHP |
Micron Technology Inc. | MU |
Microsemi Corp. | MSCC |
Millipore Corp. | MIL |
MIVA Inc. | MIVA |
MKS Instrument Inc. | MKSI |
Mobile Mini Inc. | MINI |
Monaco Coach Corp. | MNC |
Monster Worldwide Inc. | MNST |
MRO Software Inc. | MROI |
Multimedia Games Inc. | MGAM |
NCO Group Inc. | NCOG |
Neurocrine Biosciences Inc. | NBIX |
New York Community Bancorp Inc. | NYB |
New York Times Co. (The) | NYT |
News Corp. | NWS |
Northrop Grumman Corp. | NOC |
Novatel Wireless Inc. | NVTL |
Novellus Systems Inc. | NVLS |
Noven Pharmaceuticals Inc. | NOVN |
O'Charley's Inc. | CHUX |
Old National Bancorp | ONB |
Orbital Sciences Corp. | ORB |
Osteotech Inc. | OSTE |
Pactiv Corp. | PTV |
Palm Inc. | PALM |
PalmSource Inc. | PSRC |
Parexel International Corp. | PRXL |
PC Connection Inc. | PCCC |
PCTEL Inc. | PCTI |
Performance Food Group Co. | PFGC |
Pericom Semiconductor Corp. | PSEM |
Photon Dynamics Inc. | PHTN |
Plantronics Inc. | PLT |
Plexus Corp. | PLXS |
PMC-Sierra Inc. | PMCS |
PMI Group Inc. (The) | PMI |
Power-One Inc. | PWER |
PRG-Schultz International Inc. | PRGX |
Provident Bankshares Corp. | PBKS |
PSS World Medical Inc. | PSSI |
Quovadx Inc. | QVDX |
Qwest Communications International Inc. | Q |
RadiSys Corp. | RSYS |
Range Resources Corp. | RRC |
Remington Oil and Gas Corp. | REM |
RF Micro Devices Inc. | RFMD |
Rogers Corp. | ROG |
Rudolph Technologies Inc. | RTEC |
Russ Berrie and Co. Inc. | RUS |
(Table continues on next page.)
[page break]
Companies that have fast-forwarded stock options (page 5).
COMPANY NAME | SYMBOL |
ST Bancorp Inc. | STBA |
Safeco Corp. | SAFC |
Sanmina-SCI Corp. | SANM |
SBS Technologies Inc. | SBSE |
SFBC International Inc. | SFCC |
Sharper Image Corp. | SHRP |
Shuffle Master Inc. | SHFL |
Silicon Laboratories Inc. | SLAB |
Sinclair Broadcast Group Inc. | SBGI |
Skyworks Solutions Inc. | SWKS |
Solectron Corp. | SLR |
Sports Authority Inc. (The) | TSA |
SPSS Inc. | SPSS |
Standard Register Co. (The) | SR |
StarTek Inc. | SRT |
Sun Microsystems Inc. | SUNW |
Susquehanna Bancshares Inc. | SUSQ |
Swift Transportation Co. Inc. | SWFT |
Sykes Enterprises Inc. | SYKEE |
Symbol Technologies Inc. | SBL |
Tech Data Corp. | TECD |
Tempur-Pedic International Inc. | TPX |
Teradyne Inc. | TER |
Tetra Tech Inc. | TTEK |
Tibco Software Inc. | TIBX |
Trans World Entertainment Corp. | TWMC |
Trex Co. Inc. | TWP |
Triarc Companies Inc. | TRY |
Tribune Co. | TRB |
TriQuint Semiconductor Inc. | TQNT |
Triumph Group Inc. | TGI |
Ultratech Inc. | UTEKK |
Unifi Inc. | UFI |
Unisys Corp. | UIS |
United Bankshares Inc. | UBSI |
Univision Communications Inc. | UVN |
UST Inc. | UST |
UTStarcom Inc. | UTSI |
Veeco Instruments Inc. | VECO |
VeriSign Inc. | VRSN |
Vitesse Semiconductor Corp. | VTSS |
Waddell Reed Financial Inc. | WDR |
Waste Connections Inc. | WCN |
Waste Management Inc. | WMI |
Waters Corp. | WAT |
Wellman Inc. | WLM |
Wendy's International Inc. | WEN |
Whole Foods Market Inc. | WFMI |
Wild Oats Markets Inc. | OATS |
Wireless Facilities Inc. | WFII |
Wisconsin Energy Corp. | WEC |
Wolverine Tube Inc. | WLV |
Xerox Corp. | XRX |
X-Rite Inc. | XRIT |
(End of table.)
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Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.
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