I have no problem with convertible securities. In my mind they are not the same thing as employee stock options. Particularly, the enormous grants to executives. These are merely lottery tickets that pay off occasionally in enormous amounts to executives who did nothing to deserve their new found fortunes. As an example, the DJIA is down over 400 points in the last three days. And that result has almost nothing to do with what corporate executives have recently done. Sometimes this kind of move goes in the opposite direction like the tech boom and enables executives to become very wealthy through no effort on their part.
Lottery tickets have value. Measuring that value is difficult. If it was up to me, there would be no employee stock options. BRK does not offer them. If a person does something great for a company, pay him very well, but don't give him the company. There is no question that the benefits of stock options are compensation expense and that the proper place for expenses is on the income statement.
Perhaps you should read Mr. Buffets comments on expensing stock options. He has included it in the materials with the latest annual report.