Main Problem with the Grant options
Even if the stock options are no appeared on the firm's income statement. means no cost for company but a real economic lose.
A firm has 100 million outstanding share in the market ($1 per share)
If the executives exercise their options and sell their options (e.g. 10 million) in the stock market.
Now this will increase the numbers of outstanding shares in the market i.e. 100 10- 110 million shares.