With Stock Options, Employees Don’t Know What They’re Getting

Employees don’t realize what they’re getting when they receive stock options, according to a Watson Wyatt study.

Employees at U.S. companies think their options are worth 30 to 50 percent less than they really are, according to the survey of 650 high-income employees who received options.

Employees place a higher value on restricted stock, thinking that restricted stock’s worth only 18 percent less than it really is.

FASB has issued a proposal that would require companies to expense options on their income statements. Interested parties can discuss the proposal in the Benefits Forum.