To be sure, options have benefits for the issuing companies since they allow companies to spend less cash on payroll and, in some cases, give the company a tax deduction when the employees exercise them.
Options can also be potentially valuable to the employees if and when they become profitable.
In other words, these options are really dilutive of corporate earnings per share because, ultimately, the earnings will have to be divided among the optioned shares when the options are exercised. Simply put, the greater the number of shares, the less the earnings per share.