Must the directors report for a listed public company include the value of options issued to directors and officers? What if the value cannot be determined precisely?
Yes. Section 300A of the Corporations Act 2001 (the Act) requires listed Australian companies to disclose the amount of emoluments of each director and each of the five executive officers receiving the highest emoluments. There is no exclusion for emoluments in the form of options granted. All options granted have some value at the time of issue and the terms of some options mean that they have significant value. ASIC believes that the Australian Accounting Standards Board’s accounting standard AASB 1046 Director and Executive Disclosures by Disclosing Entities (AASB 1046), now provides a basis for valuing options and allocating those values over time for the purposes of disclosing remuneration of individuals in annual directors’ reports under s300A. For the purposes of s300A(1)(c), listed Australian entities should value exchange-traded options at their market price at grant date consistent with AASB 1046. Other options should be valued as at grant date using an option pricing model t
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