[room500]

I tried to look up the actual bill, but it doesn't provide any information on how stock options are valued [0]

I am curious how you would determine what the fair value of a stock option is when it is granted. Assume the option's strike price is for the current stock price. Theoretically, that stock option has a current value of "0" (assuming that it is non-transferrable so we don't have to worry about market price)

That stock option is expected to increase in value if the stock price increases (which then aligns the CEO's salary with shareholder value). So in five years, those stock options might be worth millions of dollars. But would you then say the CEO got paid millions of dollars five years ago? But the stock options when they were granted were 0 - they increased in value when they were the property of the CEO. If the CEO bought artwork 5 years ago and the value increased 10x in 5 years, would you also add that to his taxable income?

I am sure there are ways to value these options. But I can't find the details in this bill. Do you know how it might work?

0: https://sfelections.sfgov.org/sites/default/files/Documents/...

[whoisburbansky]

I have no idea how far fetched this is, but there are clearly ways to price options given current share price, the stock price, expiry, etc. Black-Scholes comes to mind, but I am not an expert at this and don't know how reasonable of a valuation you could get this way. Just pointing out that there exists a mathematical framework for option valuation, which is presumably what Wall Street uses as the basis for pricing call/puts on the open market.