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For mature companies it's pretty simple, stock-based compensation can be valued using the current share price and standard accounting principles. For young com
by s17n 6y ago
For mature companies it's pretty simple, stock-based compensation can be valued using the current share price and standard accounting principles.
For young companies, employees typically believe that their equity is worth more than the fair market value. So if anything, the non-gaap income should use a higher number for stock-based compensation expenses.
- kelnos 6y ago> For young companies, employees typically believe that their equity is worth more than the fair market value. So if anything, the non-gaap income should use a higher number for stock-based compensation expenses. That's backwards, no? If employees are delusional and over-value the stock, they'll be willing to accept less of it and be just as happy, which reduces the amount of the "expense".
- s17n 6y agoRight, and this reduced expense is the one that is in fact reflected in the GAAP numbers. But it might be useful for investors to know how much salaries would cost if they had to be payed in cash, which would be a higher number.