In instances where the firm buys back shares at higher market prices, any increase in equity that might have resulted from option exercise is upset by the treasury stock cost from the buyback. Hence, the stock buyback ends up decreasing the book value of shares and the net worth of shareholders. In fiscal 1997 the firm showed a net increase of 21 million shares that resulted from options. If you buy the arguments made above, this amount should really be considered a cash outlay for paying employees. That's not the end of the story though.
Employees end up paying tax when they exercise stock options.
The actual amount is the difference between the market price and the exercise price of the stock. This amount can be pretty staggering. In either case, the deliberations will result in a better informed stock purchasing community. While Jabil is manufacturing new products for Gateway, it does not manufacture notebooks for the company. We confused two different customers.