Parametric Technology will begin expensing stock-based compensation on July 3. Publicly-owned American technology companies, including those in the field of CAD, have fought against the new accounting requirement from the US government.
Employees are paid in stocks instead of cash to (1) encourage them to work harder to make the company more successful; (2) hold onto employees, because they have to wait to cash in the stocks; and (3) increase apparent profits, because employees are paid with a future promisary note, instead of cash.
This comes to an end in the next half year or so, as public companies are required to expense their stock options. The deadline is the fiscal Q1 for each company. The result will be lower profits than would otherwise be reported.
Comments