Essay: Stock Compensation Plans

Sample Essay

The two internet articles given here are related to Statement 123(R) of FASB regarding share based payment or stock compensation plans for employees. The standard issued by FASB required companies to record cost of stock options offered to employees and replaces Opinion 25 which did not require recognition of compensation to employees in the form of stock as compensation.

The two internet articles are based on efforts of congresspersons David Dreier and Anna Eshoo to convince FASB and SEC to reconsider the standard and allow companies not to recognise the stock based compensation costs and remove this cost from financial statements as companies would not be able to retain skilled and outstanding employees by offering cost free stock options and financial statements would not help investors in evaluating the impact of stock options on share value (Dreier). The articles do not highlight the sections and provisions of the statement rather reflect the views and efforts in legislation regarding stock compensation plans. The two congresspersons in their bill propose that broad-based stock options for employees should be preserved and provide investors with important information in making decisions (Ciesielski).

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