Coca-Cola is to deduct stock option costs from earnings in the highest-profile reaction yet to increased political and regulatory pressure on corporate America.

The announcement will send a shudder through other US firms, most of which are strongly opposed to the tougher treatment of options.

They argue it would jeopardise the use of options as a widespread incentive, not just for executives but for staff, particularly in start-ups that cannot afford to lure top staff with large cash salaries.

The firm's chairman and chief executive, Mr Doug Daft, said the decision would "ensure that our earnings will more clearly reflect economic reality".

His comments echoed Mr Alan Greenspan of the Federal Reserve and Mr Warren Buffett, the influential investor and Coke director, both of whom have pushed for companies to charge options against profits. - Financial Times Service