There's No Hiding It

When The Coca-Cola Company first volunteered to treat options asan expense in its financials as a service to shareholders, theresponse from the business community was lukewarm, even skeptical.Other corporate behemoths, unexcited by the idea of levelingearnings with a big compensation charge, were not prepared to jumpon the bandwagon. But in recent months, the trickle of companiesfollowing in Coke's footsteps has become more of a stampede, asbusinesses race to prove to investors that they, too, are dedicatedto giving investors the whole truth. Now, with the practice not yetlaw, but quickly becoming the fashion of the day, smallpublic-company CEOs have to figure out whether to follow suit.

The debate has come a long way since 1994, when similarproposals by the Financial Accounting Standards Board (FASB) werequickly quashed. But while the FASB has recently stated it will notrevisit the idea of requiring companies to expense options (untilthe International Accounting Standards Board does so), it diddecide to propose requiring that companies disclose the value ofoptions in the footnotes of quarterly financial statements, ratherthan in their annual reports.