Cisco Reveals Quarterly Options Cost

November 21, 2002 ( - The cost of Cisco Systems' stock-option program would slash 60% from its $618 million profit for the first quarter ending October 26, the company reported, according to a Reuters report.

The San Jose, California technology company’s disclosure in its quarterly US Securities and Exchange Commission filing is likely to portend things to come as regulators mull over potential requirements that all public companies do the same. It was the first time Cisco publicly revealed an options cost figure.

According to a Reuters news report, stock options costs would total $368 million, which would leave Cisco a first-quarter earnings figure of $250 million.

Earlier this month, Cisco and 32 other electronics makers pledged to increase disclosure of options-related information.

Stock options give employees the right to buy the company’s stock at a given price in the future, and are valuable only if the stock rises above the price stated on the option.