Can we pay a little extra and get these backdated?

Silicon Valley companies are keeping a close eye on an innovative stock option auction happening over the next few days that may let them whittle down the accounting charges they face on their own options.

Zions Bancorp of Utah hopes to become a hub of these kinds of auctions, where investors bid for Employee Stock Option Appreciation Rights Securities (ESOARS) – essentially a chance to profit when company insiders cash in.

Key to the system, its benefit, and Zions’ hub hopes is the expectation that bidders will pay significantly less for ESOARS than the value calcuated under current accounting rules, which – barring any regulatory holdups – would lower the amount companies have to expense for the practice.


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