Pressure mounts to reform stock option accounting

By David Brown
|Canadian HR Reporter|Last Updated: 04/10/2003

A rising chorus of complaints from institutional investors about corporate accounting practices could force Canadian employers to change how they use stock options to compensate employees.

Last month, Toronto Dominion bank announced it would soon begin to recognize stock option benefits as a compensation expense. Bank of Montreal followed suit a few days later.

There is a global push to change how companies handle stock options, said Raymond Murrill, executive compensation practice leader of consulting firm Watson Wyatt. If companies don’t make the change on their own, it is likely regulators will force them to. When that happens, it will make a lot of organizations think twice about how they use stock options, he said.