Cisco Systems offers its employees a variety of share-based compensation plans including stock options, stock appreciation rights, and restricted stock. The following is an excerpt from a disclosure note from Cisco's 2009 financial statements:
1. Cisco's share-based compensation includes stock options, stock appreciation rights, restricted stock awards, and performance-based awards. What is the general financial reporting objective when recording compensation expense for these forms of compensation?
2. Cisco reported share-based expense of $1,140 million in 2009. Without referring to specific numbers and ignoring other forms of share-based compensation, describe how this amount reflects the value of stock options.