"These plans provide that the option holder will not realize any value from the option unless specified conditions are met, such as the share price exceeding a certain value above the grant price or the company outperforming the industry. Performance-based plans can require variable plan accounting, which requires companies to show on their income statement a value determined by calculating the difference between the grant price of the options and the stock"s current fair market value, multiplied by the percentage of options vested, adjusted for the cumulative prior expense recorded."