urvey of 336 companies, the authors report that the number of lower-level employees receiving stock options dropped from 37 percent in 2002 to 27 percent in 2003 (Jakobson, Casison, 2004, 9).
According to Jason Gabrielli in Business Insight, up until recently, stock options represented an irresistible financial instrument for companies to pay both their executives and employees. In 1995, the Financial Accounting Standards Board issued FAS 123 that established the financial accounting standards for the expensing of stock options. These standards do not require that a company expense the cost of these options on their annual income statements. This measure effectively allows companies not to report the cost of stock options to stockholders. Therefore, companies are free to enrich executives at very little cost. Therefore, it is easy to understand how and why stock grants and stock options have become a desirable form of compensation to key executives (Gabrielli, 2005).
According to an essay published on the Center for Corporate Policy website (online),
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