What’s the difference between “restricted stock” and “stock options” from accounting perspective?
Thursday, February 18th, 2010qpot asked:
A quick search on “stock options” shows that many companies are switching from “stock options” to “restricted stocks” as an employee compansation vechicle.
A quick search on “stock options” shows that many companies are switching from “stock options” to “restricted stocks” as an employee compansation vechicle.
Below is what I learned from my research. It could be wrong though.
The sales of “stock options” are usually reported as loss. It reduces the company’s tax liability, but also adversely affects the company’s profit. From 2006, most companies are required to disclose the impact of the “stock options” sales to the public.
My questions,
When a company issues “restricted stocks” and the employee sells them, is the proceeding counted as “loss” like “stock options”?
Why companies don’t switch until recently? Does it have anything do to with the new SEC reporting requirement?
Thanks,