The Financial Accounting Standards Board has voted to give companies another
six months to comply with a rule requiring employee stock options to be treated
as an expense, the Washington Post reports.
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Download NowThe board voted 5-3 to approve the delay, giving publicly traded companies
until June 15 to comply with the new rule--and six months for lobbyists to urge
Congress to block the rule before it becomes effective.
"A lot can happen with an additional six months--a lot can happen legislatively,
a lot can happen at the SEC," says Jeff Peck, a lobbyist for the International
Employee Stock Options Coalition. "The political landscape could look very
different in six months."
The board wants all publicly traded companies to treat all the stock options
they grant to employees as an expense.
Critics of FASB's rule contend the rule would lead to fewer companies offering
stock options to employees, which they say would hurt recruitment and retention.
Supporters of the rule say a mandate to expense employee stock options is necessary
as a deterrent to accounting fraud.
The newspaper notes that the House of Representatives has passed legislation
that would preempt the board's rule. The House bill would require companies
to expense only the options they grant to the top five executives. A similar
measure in the Senate faces strong opposition.
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