Stock options are a great idea run amok, as evidenced by the massive option packages awarded to some high-profile CEOs. Options are given tax treatment so companies have an incentive to depend on them for more of their employee compensation. But options are not free to current investors, as they dilute present and current earnings per share. Bill Mann offers a shorthand he learned from Warren Buffett as a rough instrument to calculate their true cost.
Content: Article
Author: Bill Mann
Source: The Motley Fool
Subject: Finance
Industry: Investment Banking
Author: Bill Mann
Source: The Motley Fool
Subject: Finance
Industry: Investment Banking
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Be sure to check out the discussion board post mentioned (http://boards.fool.com/Message.asp?mid=15068595) and the corresponding calculations for the option costs over the last 4 years for about 145 well-known companies (http://www.checkcapital.com/clients/Company%20Options.htm)