Abstract

Infosys, one of India's most respected companies, offers a range of customised software services including development, maintenance, re- engineering and consulting. The software business is people-driven. Stock options are quite commonly used to attract, motivate and retain employees. Infosys has been one of the first companies in India to issue stock options (ESOP) to its employees. In recent times, accounting for stock options has become a controversial subject in the US. With its ADRs listed on the NASDAQ, Infosys is not insulated from the debate. The case discusses the pros and cons of expensing stock options and the road ahead for Infosys.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Infosys, Wipro, Microsoft, Cisco, Stock options, Employee stock option programme, ESOPs, Accounting policies, Accounting standards, FASB, Securities and Exchange Board of India, SEBI, Securities and Exchange Commission, SEC, Intrinsic value method, Fair value method, Earnings per share, EPS, ADR