House votes to block stock options change
Wednesday, July 21, 2004
WASHINGTON -- The House voted Tuesday to override a rule that would require companies to count stock options against their profits, but a key senator promised to block such action in that chamber.
The House vote was 312-111, with 198 Republicans and 114 Democrats voting for the bill that would block a proposal by the rule-setting board for accounting. The board is seeking to force publicly traded companies to record as an expense all forms of share-based payments to employees, including stock options.
The rule change proposed by the Financial Accounting Standards Board in March could dramatically reduce the reported earnings of many big companies, particularly in the high-tech industry where stock options for employees have been popular.
Federal Reserve chairman Alan Greenspan, a proponent of mandatory expensing and FASB's proposal, told senators at a Banking Committee hearing Tuesday, "I would be most concerned if Congress intervened." Of the rule-setting board, he said, "I think they do a good job. It's a tough job."
That committee's chairman, Sen. Richard Shelby, R-Ala., derided the House action as "political interference."