Stock Compensation 2004: How It Affected The S&P 500 It's the annual grind: if you want to know how stock options and other stock-based instruments affected the earnings and claims of common shareholders, you've got to spend some time with the annual report. Maybe more aptly, you've got to jump through the looking glass, because the picture you see in the financial statements isn't always what's real. While firms have made great strides in adopting the preferable accounting for stock compensation, there are still plenty of holdouts. Until Statement 123(R) becomes effective, there will be uneven displays of compensation information in corporate reporting - an unevenness that investors should take pains to make level. In this report, the earnings of the S&P 500 are put on a comparable basis for most of the firms in the index, and also presents trends in the way options and restricted stock are being distributed within the S&P 500 firms.