It is possible that a decision to issue spring-loaded options "would be within the rational exercise of business judgment," he wrote.
In effect, the company would have issued additional options to investors.
That would be to give companies a tax deduction for their expense when they issue options.
Normally, companies can issue options without reporting an expense.
For example, the company is issuing new options to executives and employees but declined to say how many.
Now the Fed could issue options on this security.
Companies may issue options that pay only if the stock price rises substantially or does better than an index of other stocks.
Some companies might decide to issue options that can be cashed in only if a particular division of a company does well.
There is a growing trend among companies to issue such options to rank-and-file employees, not just those in the executive suite.
Embraer has since issued options for 205 more of the planes.