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These excerpts taken from the EBAY 10-K filed Feb 17, 2010. Stock-Based Compensation We measure and recognize stock-based compensation expense based on the fair value measurement for all share-based payment awards made to our employees and directors, including employee stock options, employee stock purchases and restricted stock awards over the service period for awards expected to vest. Stock-based
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Table of Contentscompensation expense recognized for 2007, 2008 and 2009 was $301.8 million, $353.3 million and $394.8 million, respectively. See “Note 17 — Benefit Plans” to the consolidated financial statements included in this report. We calculated the fair value of each restricted stock award based on our stock price on the date of grant. We calculated the fair value of each stock option award on the date of grant using the Black-Scholes option pricing model. The determination of fair value of stock option awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. The use of a Black-Scholes model requires extensive actual employee exercise behavior data and a number of complex assumptions including expected life, expected volatility, risk-free interest rate and dividend yield. As a result, the future stock-based compensation expense may differ from our historical amounts. The weighted-average grant-date fair value of stock options granted during 2007, 2008 and 2009 was $10.60, $7.46 and $4.59 per share, respectively, using the Black-Scholes model with the following weighted-average assumptions:
Our computation of expected volatility for 2007, 2008 and 2009 was based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating forfeitures, including employee class and historical experience. Stock-based compensation We typically issue two types of stock-based awards: restricted stock units (including performance-based restricted stock units) and stock options. We determine compensation expense associated with restricted stock units based on the fair value of our common stock on the date of grant. We determine compensation expense associated with stock options based on the estimated grant date fair value method using the Black-Scholes valuation model. We generally recognize compensation expense using a straight-line amortization method over their respective vesting period for awards that are ultimately expected to vest. Accordingly, stock-based compensation for 2007, 2008 and 2009 has been reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures. We recognize a benefit from stock-based compensation in equity if an incremental tax benefit is realized by following the ordering provisions of the tax law. In addition, we account for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit through the income statement. These excerpts taken from the EBAY 10-K filed Feb 20, 2009. Stock-Based
Compensation
On January 1, 2006, we adopted FAS 123(R), which
requires a fair value measurement and recognition of
compensation expense for all share-based payment awards made to
our employees and directors, including employee stock options,
employee stock purchases and restricted stock awards over the
service period for awards expected to vest. Stock-based
compensation expense recognized for 2006, 2007 and 2008 was
$317.4 million, $301.8 million and
$353.3 million, respectively. See
“Note 15 — Benefit Plans” to the
consolidated financial statements included in this report.
We calculated the fair value of each restricted stock award
based on our stock price on the date of grant. We calculated the
fair value of each option award on the date of grant using the
Black-Scholes option pricing model. The determination of fair
value of share-based payment awards on the date of grant using
an option-pricing model is affected by our stock price as well
as assumptions regarding a number of highly complex and
subjective variables. The use of a Black-Scholes model requires
extensive actual employee exercise behavior data and a number of
complex assumptions including expected life, expected
volatility, risk-free interest rate and dividend yield. As a
result, the future stock-based compensation expense may differ
from our historical amounts. The weighted-average
Table of Contents
grant-date fair value of stock options granted during 2006, 2007
and 2008 was $10.47, $10.60 and $7.46 per share, respectively,
using the Black-Scholes model with the following
weighted-average assumptions:
Our computation of expected volatility for 2006, 2007 and 2008
was based on a combination of historical and market-based
implied volatility from traded options on our stock. Our
computation of expected life was determined based on historical
experience of similar awards, giving consideration to the
contractual terms of the stock-based awards, vesting schedules
and expectations of future employee behavior. The interest rate
for periods within the contractual life of the award is based on
the U.S. Treasury yield curve in effect at the time of
grant. The estimation of awards that will ultimately vest
requires judgment, and to the extent actual results or updated
estimates differ from our current estimates, such amounts will
be recorded as a cumulative adjustment in the period estimates
are revised. We consider many factors when estimating
forfeitures, including employee class and historical experience.
Stock-Based Compensation On January 1, 2006, we adopted FAS 123(R), which requires a fair value measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock options, employee stock purchases and restricted stock awards over the service period for awards expected to vest. Stock-based compensation expense recognized for 2006, 2007 and 2008 was $317.4 million, $301.8 million and $353.3 million, respectively. See “Note 15 — Benefit Plans” to the consolidated financial statements included in this report. We calculated the fair value of each restricted stock award based on our stock price on the date of grant. We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. The use of a Black-Scholes model requires extensive actual employee exercise behavior data and a number of complex assumptions including expected life, expected volatility, risk-free interest rate and dividend yield. As a result, the future stock-based compensation expense may differ from our historical amounts. The weighted-average
Table of Contentsgrant-date fair value of stock options granted during 2006, 2007 and 2008 was $10.47, $10.60 and $7.46 per share, respectively, using the Black-Scholes model with the following weighted-average assumptions:
Our computation of expected volatility for 2006, 2007 and 2008 was based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating forfeitures, including employee class and historical experience. Stock-based
compensation
We adopted Statement of Financial Accounting Standards (SFAS)
No. 123 (revised 2004), “Share Based Payment”
(FAS 123(R)) using the modified prospective transition
method beginning January 1, 2006. Accordingly, during 2006,
2007 and 2008, we recorded stock-based compensation expense for
awards granted prior to, but not yet vested, as of
January 1, 2006, as if the fair value method required for
pro forma disclosure under FAS 123 were in effect for
expense recognition purposes, adjusted for estimated
forfeitures. For these awards, we have continued to recognize
compensation expense using the accelerated amortization method
under Financial Accounting Standards Board (FASB) Interpretation
28 “Accounting for Stock Appreciation Rights and Other
Variable Stock Option or Award Plans” (FIN 28). For
stock-based awards granted after January 1, 2006, we have
recognized compensation expense based on the estimated grant
date fair value method using the Black-Scholes valuation model.
For these awards, we have recognized compensation expense using
a straight-line amortization method. As FAS 123(R) requires
that stock-based compensation expense be based on awards that
are ultimately expected to vest.
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eBay
Inc.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Accordingly, stock-based compensation for 2006, 2007 and 2008
has been reduced for estimated forfeitures. When estimating
forfeitures, we consider voluntary termination behaviors as well
as trends of actual option forfeitures. We recognize a benefit
from stock-based compensation in equity if an incremental tax
benefit is realized by following the ordering provisions of the
tax law. In addition, we account for the indirect effects of
stock-based compensation on the research tax credit and the
foreign tax credit through the income statement.
Stock-based compensation We adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), “Share Based Payment” (FAS 123(R)) using the modified prospective transition method beginning January 1, 2006. Accordingly, during 2006, 2007 and 2008, we recorded stock-based compensation expense for awards granted prior to, but not yet vested, as of January 1, 2006, as if the fair value method required for pro forma disclosure under FAS 123 were in effect for expense recognition purposes, adjusted for estimated forfeitures. For these awards, we have continued to recognize compensation expense using the accelerated amortization method under Financial Accounting Standards Board (FASB) Interpretation 28 “Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans” (FIN 28). For stock-based awards granted after January 1, 2006, we have recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For these awards, we have recognized compensation expense using a straight-line amortization method. As FAS 123(R) requires that stock-based compensation expense be based on awards that are ultimately expected to vest.
Table of ContentseBay Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Accordingly, stock-based compensation for 2006, 2007 and 2008 has been reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures. We recognize a benefit from stock-based compensation in equity if an incremental tax benefit is realized by following the ordering provisions of the tax law. In addition, we account for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit through the income statement. These excerpts taken from the EBAY 10-K filed Feb 29, 2008. Stock-Based
Compensation
Stock-based compensation expense related to equity awards and
employee stock purchases for 2005, 2006 and 2007 was allocated
as follows (in thousands, except per share amounts):
In general, the stock-based compensation expense for our equity
incentive awards are recognized over their respective vesting
periods. Total stock-based compensation costs included in
capitalized development costs was $8.8 million and
$8.4 million for the years ended December 31, 2006 and
2007, respectively. There was no stock-based compensation costs
included in capitalized development costs during 2005.
Prior to the adoption of FAS 123(R), the intrinsic value of
Skype’s and Shopping.com’s unvested common stock
options assumed in the acquisition was recorded as unearned
stock-based compensation. Upon the adoption of FAS 123(R)
in January 2006, the unearned stock-based compensation balance
of $45.5 million was reclassified to additional paid-in
capital.
Stock-Based Compensation Stock-based compensation expense related to equity awards and employee stock purchases for 2005, 2006 and 2007 was allocated as follows (in thousands, except per share amounts):
In general, the stock-based compensation expense for our equity incentive awards are recognized over their respective vesting periods. Total stock-based compensation costs included in capitalized development costs was $8.8 million and $8.4 million for the years ended December 31, 2006 and 2007, respectively. There was no stock-based compensation costs included in capitalized development costs during 2005. Prior to the adoption of FAS 123(R), the intrinsic value of Skype’s and Shopping.com’s unvested common stock options assumed in the acquisition was recorded as unearned stock-based compensation. Upon the adoption of FAS 123(R) in January 2006, the unearned stock-based compensation balance of $45.5 million was reclassified to additional paid-in capital. This excerpt taken from the EBAY 10-K filed Feb 28, 2007. Stock-Based
Compensation
Stock-based compensation expense related to stock options and
employee stock purchases for 2004, 2005 and 2006 was allocated
as follows (in thousands, except per share amounts):
Prior to adopting FAS 123(R), we presented all tax benefits
resulting from the exercise of stock options as operating cash
flows in our statements of cash flows. FAS 123(R) requires
cash flows resulting from excess tax benefits to be classified
as a part of cash flows from financing activities. Excess tax
benefits are realized tax benefits from tax deductions for
exercised options in excess of the deferred tax asset
attributable to stock compensation costs for such options. As a
result of adopting FAS 123(R), $92.4 million of excess
tax benefits for the year ended December 31, 2006 have been
classified as a financing cash inflow. Cash received from option
exercises under all share-based payment arrangements for the
years ended December 31, 2004, 2005 and 2006, was
$650.6 million, $599.8 million and
$313.5 million, respectively. Total stock-based
compensation costs included in capitalized development costs was
$8.8 million for the year ended December 31, 2006.
There was no stock-based compensation costs included in
capitalized development costs during 2005 and 2004.
Prior to the adoption of FAS 123(R), the intrinsic value of
Skype’s and Shopping.com’s unvested common stock
options assumed in the acquisition were recorded as unearned
stock-based compensation. Upon the adoption of FAS 123(R)
in January 2006, the unearned stock-based compensation balance
of $45.5 million was reclassified to additional paid-in
capital.
This excerpt taken from the EBAY 10-Q filed Jul 28, 2006. Stock-based
Compensation
Beginning on January 1, 2006, we began accounting for
stock-based compensation under the provisions of Financial
Accounting Standards No. 123 (revised 2004),
“Share-Based Payment” (FAS 123(R)), which
requires the recognition of the fair value of stock-based
compensation. Under the fair value recognition provisions for
FAS 123(R), stock-based compensation cost is estimated at
the grant date based on the fair value of the awards expected to
vest and recognized as expense ratably over the requisite
service period of the award. We have used the Black-Scholes
valuation model, or BSM, to estimate fair value of our
stock-based awards which requires various judgmental assumptions
including estimating stock price volatility, forfeiture rates,
and expected life. Our computation of expected volatility is
based on a combination of historical and market-based implied
volatility. In addition, we consider many factors when
estimating expected forfeitures and expected life, including
types of awards, employee class, and historical experience. If
any of the assumptions used in the BSM model change
significantly, stock-based compensation expense may differ
materially in the future from that recorded in the current
period.
We adopted FAS 123(R) using the modified prospective method
which requires the application of the accounting standard as of
January 1, 2006. Our condensed consolidated financial
statements as of and for the three and six months ended
June 30, 2006 reflect the impact of FAS 123(R). In
accordance with the modified prospective method, the condensed
consolidated financial statements for prior periods have not
been restated to reflect, and do not include, the impact of
FAS 123(R).
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