I have been an investor for decades. Of course I want stock compensation treated as a cost when companies report earnings. It is especially crazy when companies trumpet their billions spent buying stock at the same time they want to treat stock giveaways as not a cost.

You might think just avoid in investing in companies that are so crazy as to do that (in their promoted non-GAAP numbers) because that must be a sign they are not so bright and why rely on them to make wise investing decisions for your company. But you would find yourself ruling out many technology companies. It isn't that they don't know this is wrong, they just realize it is in their executives (CFO, CEO etc.) interests to promote the false earnings because many people will accept it.

My blog post from last week

  http://investing.curiouscatblog.net/2016/04/21/buybacks-giveaways-to-executives-and-non-gaap-earnings/

This recent Planet Money episode [1] talked about how everyone thought options were free a few years ago, including former US Secretary of Commerce Barbara Franklin. It is fascinating and a large contributor to the skyrocketing executive pay we see today.

[1]http://www.npr.org/2016/02/18/467253394/why-did-americas-ceo...

fully diluted eps?

How do you think they help? Imagine a company with 1mn shares trading at $100, with $5mn earnings (ignoring taxes for simpliciy), i.e. $5 per share. Let's say they can reduce cash compensation to employees by $5mn giving instead $10mn in stock (0.1mn new shares). GAAP earnings are now $0 per share. Fully-diluted earnings (excluding stock based compensation) are $9.1 per share.

Not entirely true. I used to be an analyst and we would still look at and comment on non-recurring items to understand if they are relevant to the health of the business. In reports, we'd even comment/refer to past non-recurring items. They factor into models if we thought there was a possibility of them re-occurring.