"There was an initial impression that stock options were going to disappear, but we haven't noticed that," Jonathan Miller, President of Plan Management Corp. of Ardmore, Penn., told AccountingWEB. "People are doing smaller plans and being more responsible about giving their options out. All the other plans have to be expensed as well.

"There has been almost a whole new industry that's grown up for people who provide administration services, people who have developed software for the companies to use themselves and companies like us, in partnership with accounting firms. If accounting firms don't have accurate information about the option plans, they can't do proper expensing for their clients."

Each of the different equity incentives is accounted for differently, adding to the complexity of accounting and plan management software, according to Miller. For example, stock option grants are accounted for differently than Stock Appreciation Rights (SARs), which are accounted for differently from stock performance plans.

Plan management software is not always user friendly. This is especially true when the users are marketing and or human relations personnel rather than accounting or finance staffers. Navigating the range of regulations and guidance can also be challenging. Miller's insights offer accounting professionals a unique opportunity to explore the present world of equity incentives and a glimpse of what the future may hold.

Read more from AccountingWEB's A Conversation About Equity Incentives with Jonathan Miller.
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