, Columnist
Shame on Silicon Valley's Stock Expense Stragglers
They continue to tout profit measures that exclude stock compensation costs and obscure their valuations.
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I wrote a year ago about tech companies' addiction to "adjusted" measures for earnings that made profits look better than they really were. It's true that generally accepted accounting principles, or GAAP, can't capture all the nuances of a business. But too many tech companies were abusing GAAP to the point of absurdity.
Since then, there has been much progress. Several tech companies, notably Facebook, Amazon.com Inc., Google and Electronic Arts Inc., have started or plan to disclose by-the-book earnings more prominently in their financial reports. The biggest sea change is a move away from non-GAAP earnings disclosures that exclude the non-cash but real costs of stock issued to employees as part of their compensation.