�Alistair Barr, with Innovation Inflatable Space Station

Astronauts will inflate BEAM in late May for a two-year test. Bigelow plans to launch a pair of commercial modules in 2020. Given the finite storage in a rocket, “you get a lot more living space with an inflatable,” says Jeffrey Hoffman, a former NASA ast

his latest shareholder letter, Warren Buffett called the omission of pay “the most egregious” example of NON-GAAP accounting. James Schnurr, chief accountant for the U. S. Securities and Exchange Commission, said in a March speech that executives and directors should challenge use of the NON-GAAP numbers.

An investor in Facebook and Amazon says both companies have privately acknowledged changing their accounting for competitive advantage as well as to soothe shareholders. A looser accounting approach made struggling companies look financially stronger than they really are and better able to compete for top talent. Twitter trades at about 36 times its estimated 12-month profit, but add in equity compensation and the company is expected to lose money. Its stockbased pay last year was more than twice its NON-GAAP profit, according to Bernstein research. (Twitter didn’t respond to an e-mail seeking comment.)

Fish cited Linkedin as a company that should keep a tighter rein on its equity grants. Analysts estimate the business-focused social network will make $591 million in 2017, or a loss of $36 million when stock-based compensation and other costs are included, according to data compiled by Bloomberg. Linkedin cut growth forecasts earlier this year, drawing more attention to long-term compensation costs. “When fundamentals deteriorate relative to high-growth expectations and stock-based comp is high as well, companies can be doubly penalized,” Fish says. Linkedin’s stock price is down 45 percent this year, while Facebook’s is up 12 percent.

Linkedin spokesman Hani Durzy says that while the company doesn’t plan to change its reporting practices, it’s trying to reduce stock-based pay to 10 percent of revenue from 17 percent. Equity grants aren’t going away, though. Says Durzy: “Talent is critical in this industry, and we want to make sure that we’re balancing the trade-offs appropriately.” Sarah Frier

The bottom line Profits for most public companies don't shift much when accounting for stock plans. Tech companies are different.

Edited by Jeff Muskus Bloomberg.com Form and function The Bigelow Expandable Activity Module, or BEAM, is a 565-cubic-foot addition to the International Space Station designed to test expandable-space-station tech. It was carried aloft by a Spacex Dragon cargo ship in April. 2. Inflate Once in orbit, the modules fill with air from onboard tanks to expand to their intended size. The fabric resists impacts from micrometeoroids and debris more effectively than standard aluminum designs.

Funding Bigelow says he's invested about $290 million in his company. NASA contracted with him to develop BEAM for $17.8 million. 1. Innovator Robert Bigelow Age

Founder and chief executive officer of Bigelow Aerospace, a 130-employee company in North Las Vegas

Launch Bigelow's expandable station modules are made of as many as 30 layers of high-strength fabric, including Kevlar. They take up 127 cubic feet when compressed for launch.