Compensating for Change

Originally Published MX January/February 2006

FINANCE

A looming shift in accounting protocols is significantly affecting how medical device companies compensate their executives.

Ted Ginsburg

A recent accounting rule change will dramatically affect executive pay practices at many medical device companies in 2006. In light of the change, which requires employers to record the value of stock options granted to employees as an expense on financial statements, many medical device companies are reevaluating their executive compensation strategies.

This article discusses the nature of the accounting rule change, the impact of the rule change on companies' executive compensation practices, and what medtech executives can expect to see in the future.

Before and After