Treatment of Employee Stock Options in the U.S. National Economic
Accounts, by Carol E. Moylan
U.S. companies increasingly use the granting of employee stock options
as part of an overall compensation package. What was originally an executive
perk is now often provided to all employees. This growth has added significance
to several questions on the treatment and valuation of these stock options.
What are employee stock options? How are wages and salaries and profits
measured? How are these options currently treated in national economic
accounts of the United States? What are the major conceptual measurement
and timing issues? What are the major practical measurement and timing
issues? Could a mismeasurement of these options be a source of the swing
in the U.S. statistical discrepancy for the most recent years? This paper
will focus on answering these questions.
Last changed: October 30, 2000