US tech company to book share options
Leading US software company Computer Associates has joined a growing number of US companies by announcing its intention to charge the cost of stock options to its accounts.
The company said yesterday that it will expense the cost of all new stock options granted beginning at its next fiscal year on 1 April 2003.
Sanjay Kumar, president and CEO, said: ‘CA’s decision to expense stock options is part of our ongoing commitment to adhere to best practices in everything we do. The new policy puts options on an equal footing with other kinds of compensation and will allow us to continue to design compensation packages that motivate employees and align their interests with those of all share owners.’
All future stock option will be charged over the vesting period based on the fair value at the date the options are granted. CA said it expected the impact to be around $0.02 per share in the initial year following its adoption.
Coca-Cola announced earlier this month that it would begin booking the cost of its stock options in the fourth quarter of this year, while internet retail giant Amazon said it would begin booking stock options next year.