Your Options May Be Limited

Rank-and-file employees could get the short end of the stick if companies are required to count stock options as an expense — which is almost certain to happen this year or next. Seventy-four percent of firms would reduce or eliminate broad-based option plans, according to a survey out last week from Mellon Financial's Human Resources & Investor Solutions group. But only 25% said they would cut back on options for executives. At right are some ways companies say they'll try to make up the lost options to their nonexecutive employees. Requiring firms to expense options would give shareholders a better idea of costs, but companies that rely heavily on such grants, like tech firms, are fighting hard against it. Says Ted Buyniski, a compensation expert at Mellon: "Options aren't dead, but they're certainly not feeling well."