The Acceleration of Stock Options in Anticipation of FAS 123 (R)

The Financial Accounting Standards Board (FASB) mandated the expensing of stock options with FAS 123 (R). As of March 2006, 749 companies had accelerated the vesting of their employee stock options and avoided a reduction in their reported profits that otherwise would have occurred under the new standard. There are many different motives for the acceleration strategy, and the focus of this study is to determine whether shareholders viewed these motives as either positive or negative. A favorable return subsequent to an acceleration announcement would signify that shareholder's viewed management's motives as positive. An unfavorable return subsequent to an acceleration announcement would signify that shareholder's viewed management's motives as negative. The evidence from this study suggests that shareholders reacted favorably, on average, to acceleration announcements. However, these results lack statistical significance and are based on a small sample, thus, they should be interpreted with caution.

What Does Height Really Mean? Part III: Height Systems

This is the third paper in a four-part series considering the fundamental question, “what does the word “height” really mean?” The first paper reviewed reference ellipsoids and mean sea level datums. The second paper reviewed the physics of heights culminating in a simple development of the geoid and explained why mean sea level stations are not all at the same orthometric height. This third paper develops the principle notions of height, namely measured, differentially deduced changes in elevation, orthometric heights, Helmert orthometric heights, normal orthometric heights, dynamic heights, and geopotential numbers. We conclude with a more in-depth discussion of current thoughts regarding the geoid.