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Employee Stock Purchase Plans

By mlayton ·
So does everyone know about this? As for me, it's a very bad thing, being at a company whose stock consistently performs well, my stocks purchased through this plan have financed a new truck and many vacations....

I am paraphrasing the attached from an e-mail I received (which is company confidential, so I can't cut & paste...)

Financial Standards Accounting Board (FASB) currently has a new rule under review that, if enacted as planned on December 15, 2004, would require US companies to expense stock-based incentive plans. Many companies feel that the incentive programs would then be unaffordable and they would be forced to reduce or drop stock-based incentive programs.This especially affect companies with Employee Stock Purchase Plans (ESPPs) offering employees a discount in excess of five percent- they would be required to treat that discount as an expense.

FASB?s proposed new rule is generating much debate and controversy from high-tech companies that use stock-based incentives as a means to motivate and reward their employees. Will this ruling force companies to stop offering Employee Stock Purchase Plans (ESPP) and stock option grants to employees because it would have a very detrimental impact on their bottom line and stock price?

I'd appreciate thoughts, other feedback on this...

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by john_wills In reply to Employee Stock Purchase P ...

The bottom line would only APPEAR different. At present the non-expensing gives a faulty view of the firm's financial health. Managers who do not want to expense options are afraid that they can't really afford them now.

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