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.

Here's a list, provided by the Corporate Library, of companies that have fast-forwarded stock options.

Acxiom CorporationACXM
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 GenomicsCRA
Applica IncorporatedAPN
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).

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
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
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).

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
Hewitt Associates Inc.HEW
Hillenbrand Industries Inc.HB
Hooper Holmes Inc.HH
Horace Mann Educators Corp.HMN
ICU Medical Inc.ICUI
ImClone Systems Inc.IMCL
InFocus Corp.INFS
Ingersoll-Rand Co. LimitedIR
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
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 InternationalKFY
Lattice Semiconductor Corp.LSCC
LeapFrog Enterprises Inc.LF
Learning Tree International Inc.LTRE
Libbey Inc.LBY
Linear Technology Corp.LLTC
Lucent Technologies Inc.LU
Magnetek Inc.MAG

(Table continues on next page.)

[page break]

Companies that have fast-forwarded stock options (page 4).

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
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 BancorpONB
Orbital Sciences Corp.ORB
Osteotech Inc.OSTE
Pactiv Corp.PTV
Palm Inc.PALM
PalmSource Inc.PSRC
Parexel International Corp.PRXL
PC Connection Inc.PCCC
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).

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
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
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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