
Cost control is indivisible from operational risk management 343
on income statements. Siebel Systems, a software firm, provides an example. In 2001,
Siebel had income of $254.6 million, or 56 cents per share. Counting all options in the
share count, that shrank to 33 cents a share, about 40% lower.
䊏 If Siebel had expensed options, then it would have reported a $467 million loss, or
$1.02 a share,
䊏 This and other examples from expensing options speak volumes of disappearing
shareholder value, turning the income statement on its head.
Experts say that misleading accounting for stock options has concealed a
tremendous transfer of wealth from shareholders ...