You just joined as a new analyst and your boss slaps this on your desk Adobe 2000 10K.   What is the real net income to shareholders? Assume a 35% tax bracket.

You remember from reading in Berkshire Hathaway’s 1992 annual report, “If options aren’t a form of compensation, what are they? If compensation isn’t an expense, what is it? And, if expenses shouldn’t go into the calculation of earnings, where in the world should they go?”

FAJ Stock Options and the Lying Liars Who Dont Want to Expense Them  No need to read this to answer the question.


An answer will be posted next week.    The correct answer will garner a prize and adulation.