Dell cuts estimate for fiscal 2007 options expense

From Reuters:

Computer maker Dell Inc. (DELL) on Friday cut its estimate of what it will cost the company to expense options awarded as employee compensation in fiscal year 2007 by 8 cents a share.
Dell now expects to incur full-year after-tax stock-based compensation expenses of $250 million, or 10 cents a share, for fiscal 2007. That’s below its previous forecast of 18 cents.
The company said it plans to accelerate the vesting of some “out of the money” stock options. That will reduce stock-based compensation expenses it would otherwise be required to recognize under reporting requirements from new accounting rule, FASB 123R, Dell said.
The company is fully vesting previously granted stock options that have exercise prices higher than $30.75, Dell’s closing price on Thursday.
The company’s options typically vest over a five-year period.

Ironically, it’s one of the benefits of a sagging share price.

Posted by on January 6th, 2006 at 2:18 pm


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