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SEC Updates Accounting Guidance for Executive Stock Options

Nov. 29, 2021, 6:13 PM

Freshly issued stock options given to corporate executives ahead of big deals or better-than expected results should reflect the value of the shares after any market-moving announcements, the SEC said Monday.

New guidance, Staff Accounting Bulletin 120, addresses what the Securities and Exchange Commission refers to as non-routine, spring-loaded compensation arrangements provided shortly before a major public announcement. Both the accounting for the awards and the disclosures should reflect the economics of the compensation, the SEC said in a statement.

  • “Companies should not grant spring-loaded awards under any mistaken belief that they do not have to reflect any of ...