Accounting
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Xilinx, Inc.—Stock-based Compensation
Xilinx, Inc. designs, develops, and markets complete programmable logic solutions, including advanced integrated circuits, software design tools, predefined system functions delivered as intellectual property cores, customer training, field engineering and technical support. Customers are electronic equipment manufacturers primarily in the telecommunications, networking, computing, industrial, and consumer markets. Products are sold globally through a direct sales management organization and through franchised domestic and foreign distributors. (Source: Company 2007 Form 10-K)
Learning Objectives • Discuss the economic and corporate issues surrounding stock-based compensation. • Understand how to account for stock-based compensation and how the activity is presented in the financial statements. • Read and understand footnotes to the financial statements concerning stock-based compensation. • Explain the financial statement tax effects of stock-based compensation. Refer to the 2007 financial statements of Xilinx, Inc., and Note 3, Stock-Based Compensation. Note: following Xilinx’s convention, the case refers to the year ended March 31, 2007, as “fiscal 2007” and to the year ended April 1, 2006, as “fiscal 2006.” Concepts a. Consider the information on Employee Stock Option Plans (beginning on page 50 of Xilinx’s annual report). i. ii. Explain, in your own words, how this plan works. What incentives does this plan provide for Xilinx employees? Explain briefly the following terms used in Note 3: grant date, exercise price, vesting period, expiration date, options granted, options exercised, and options forfeited.
b. Note 3 (page 47 of Xilinx’s annual report) indicates that in fiscal 2007, Xilinx adopted a new accounting method for its stock options and other stock-based compensation as required by SFAS 123R. How does Xilinx now account for stock options? How does this differ from the method Xilinx used before
Xilinx, Inc.—Stock-based Compensation
Xilinx, Inc. designs, develops, and markets complete programmable logic solutions, including advanced integrated circuits, software design tools, predefined system functions delivered as intellectual property cores, customer training, field engineering and technical support. Customers are electronic equipment manufacturers primarily in the telecommunications, networking, computing, industrial, and consumer markets. Products are sold globally through a direct sales management organization and through franchised domestic and foreign distributors. (Source: Company 2007 Form 10-K)
Learning Objectives • Discuss the economic and corporate issues surrounding stock-based compensation. • Understand how to account for stock-based compensation and how the activity is presented in the financial statements. • Read and understand footnotes to the financial statements concerning stock-based compensation. • Explain the financial statement tax effects of stock-based compensation. Refer to the 2007 financial statements of Xilinx, Inc., and Note 3, Stock-Based Compensation. Note: following Xilinx’s convention, the case refers to the year ended March 31, 2007, as “fiscal 2007” and to the year ended April 1, 2006, as “fiscal 2006.” Concepts a. Consider the information on Employee Stock Option Plans (beginning on page 50 of Xilinx’s annual report). i. ii. Explain, in your own words, how this plan works. What incentives does this plan provide for Xilinx employees? Explain briefly the following terms used in Note 3: grant date, exercise price, vesting period, expiration date, options granted, options exercised, and options forfeited.
b. Note 3 (page 47 of Xilinx’s annual report) indicates that in fiscal 2007, Xilinx adopted a new accounting method for its stock options and other stock-based compensation as required by SFAS 123R. How does Xilinx now account for stock options? How does this differ from the method Xilinx used before