Stock option plans make sense

Article Abstract:

Stock option plans for employees serve companies in two ways, as a means of accumulating capital and as an employee benefit. For accounting treatment purposes, stock option plans are categorized as either non-compensatory or compensatory. Non-compensatory plans must be open to all employees, with equal amounts of stock offered to all employees, under purchase or exercise options subject to reasonable time limitations. For non-compensatory stock option plans, discounts on the market price of the stock should be no greater than discounts offered to other investors. Compensatory plans must be recognized as a compensation expense, whereas non-compensatory plans are not. Non-compensatory plans are accounted for in the same way as stock issued in a public offering. Measuring and recognizing compensation expenses, required disclosures, and taxation and valuation of stock option plans are discussed.

Innovations, Employee stock options, Profit sharing

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Managing health care costs: flex-plans

Article Abstract:

Companies can manage their health care costs through Section 125 flex-plans. Section 125 of the Internal Revenue Code allows companies to offer employees flexible benefits through their compensation programs. Employees can voluntarily redirect part of their remuneration to qualified programs sponsored by their companies. The contributions are tax-free if they are designated for expenses approved by the IRS. There are three levels of flex-plans: premium-only plans, where employees contribute to insurance premiums for dental, disability, eye-care, medical, and group term life coverage; flexible spending accounts, which is the premium plan plus two options for unreimbursed medical expenses and dependent care; and cafeteria plans, where employees select benefits from a menu of options.

Laws, regulations and rules, Revenue, Cafeteria benefit plans

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Making child care an employee benefit

Article Abstract:

Companies which want to provide some form of child care as an employee fringe benefit should present the benefits as a way to attract and retain quality employees while keeping the costs to firms to a minimum. The steps companies must take to incorporate child care into benefit plans include identifying employee needs; defining child care options and the feasibility of each; and adopting a program. Companies need to discover what child care problem employees have and how to solve them. The willingness of employees without dependent children to support care programs should also be determined. The child care options that are available include referral services, dependent care assistance plans and maternal and paternal leaves of absence.

Finance, Day care centers, Employer-supported day care, Employer supported child care

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