Auctioning Options
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David Reilly appeared on C2 of the WSJ today with an article on the SEC's final clearance for Zions Bancorp to use an auction process to value employee stock options. It's a novel approach that Zions will presumably take to market. Potentially a nice option for publicly traded companies to keep their FAS123R expense down.
But frankly, why go to all the trouble? Do analysts really factor in non-cash expenses such as the expensing of stock options on the income statement? Perhaps I'm naive, but I figured everyone would factor them out. Perhaps I am too taken with Martin Whitman's arguments against the primacy of the income statement.