Seventy-two percent of respondents also reported stock options serve as their only long-term incentive program. Consequently, Michael S. Kesner, partner in Deloitte & Touche's Performance Management and Compensation Practice, expects a "very large correction in executive pay. Expensing options, combined with efforts to keep within stock dilution guidelines, will force many companies to cut back on grants to senior managers and perhaps eliminate them entirely for middle managers and professionals."

The survey also found that as companies wait for further clarification they are examining their compensation programs and looking to add more than one alternative to fill the void left by stock options, including cash-based performance plans, performance-vested stock options, and performance-vested restricted stock. 

Kesner added that "another wave of prominent prominent companies announcing plans to expense options, in addition to the Financial Accounting Standards Board's recent announcement about converging its standards with the International Accounting Standards Board's, could trigger an options-expensing Tsunami."

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