More than 80% of financial analysts and portfolio managers around the world who responded to a survey believe any stock options granted to employees are compensation and should be recognized as an expense in the income statements of the companies that grant them.

Conducted by the Association for Investment Management and Research, the survey measured the views of 1,944 AIMR members, including equity and fixed income analysts for investment management firms and brokerage houses, as well as those who manage portfolios for institutional or private clients.

“Our survey results were remarkably consistent across geographical regions and investment disciplines,” said Rebecca McEnally, vice president of AIMR’s advocacy program. “Analysts and portfolio managers clearly want to see employee stock options treated as an expense in the income statement. Now investors have to search for that information in the notes to the financial statements, if it’s available at all, and factor it into their valuation of the company’s equity or debt.

“Requiring stock options to be recognized as expense would provide greater transparency,” she noted. “It would give a more accurate picture of a company’s financial health.”