Let's pretend you own a small business that cannot afford to pay huge salaries for talent. In the old days, you could grant key employees a fist full of stock options in lieu of a large paycheck. If the company succeeded, the optionees would be rewarded. But under SFAS 123R, the calculated present value of the option grant needs to be expensed now and not when the optionee cashes-in their options. As a small business owner, would you be inclined to grant stock options to attract talent or would you consider another method? Also, did SFAS 123R make it tougher for start-up companies to hire quality employees?

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Stock Options for Small Businesses After SFAS 123R The Challenge Youre right SFAS 123R which requires companies to expense the fair value of stock opt... View the full answer