Please inform us more about options costs. I'm interested, I myself haven't looked into accounting rules, and have only my limited, but personal, experience to go by.
Again, from what I've seen in the past, an employee exercising an option is a NET GAIN to the company (the employee is purchasing the share), not a loss. The shares the employee buys come from the company options pool, not from the open market.
I suppose that if a company ran out of options in the option pool, then they'd be in trouble. Employee says, "I'll exercise 1,000 shares at $2.00 per share." They give the company $2,000 and get their shares. The company say, "Oh no, we have no more options in the pool -- we had to buy on the open market!" The company buys 1,000 shares at $35 per share. The company in this case is in the hole $35K - $2K = $33K. But companies are smarter than this! Again, please, tell us where the real cost is, as visible in a line item (per FASB rules).
If, as you suggested, the company paid out a cash bonus, then this WOULD affect the company's bottom line. The bonus would be a compensation cost, with direct impact on the quarterly earnings statement. Options are better for both the company and the employee. More incentive for the employee to work (potential huge payoff), no impact on the company's bottom line.
It's the shareholders that get screwed, but usually they don't know or don't care, because they're making off quite well too! The key for the company/employees is to bleed options shares into the market slowly so that nobody realizes -- of course, this is a big challenge after the 6-month post-IPO lockout period for many companies, many employees rush to sell at that point. But for the most part it works. The frogs in the pot don't know the water's reaching boiling point.
Options are an expense to a company and do affect earnings. FASB (Federal Accounting standards board) rules are lose regarding how companies report the cost of options. Very few accurately report the cost of the options, others include a foot note in their annual reports. They are not obligated to shaow the affects on their balance sheet.
Bottom line: Options are an expense/cost to a company and they dilute shareholder equity. I would prefer if they paid cash bonus, than dilute equity.