<nobr>Jul 12, 2004</nobr>

Stock Options Accounting Reform Act (H.R. 3574) and (S. 1890)

The House passed on July 20 The Stock Option Accounting Reform Act (H.R. 3547) by a vote of 312 – 111 that would block a FASB proposal to mandate stock option expensing and would require companies to expense options granted to the CEO and the next four highest-paid officers. The bill also prohibits SEC recognition of any further stock option expensing requirements pending the completion of economic impact studies by the Commerce and Labor Departments. Included in the bill is a managers amendment offered by Chairman of the House Financial Services Committee Mike Oxley (R-OH) that allows companies that already expense stock options on a voluntary basis to continue to do so.


The bill will proceed to the Senate for consideration where similar legislation (S. 1890) has been introduced by Sens. Mike Enzi (R-WY) and Harry Reid (D-NV). The Senate bill is currently under consideration by the Senate Banking, Housing, and Urban Affairs Committee. However, the bill faces an uphill battle, as Chairman of the Committee Sen. Richard Shelby (R-AL) has made clear that he will not support any legislation "hindering the ability of the FASB to set accounting standards relating to the issuance of stock options".

Text Files:

Stock Options Accounting Reform Act (H.R. 3574)

Senate Related Bill (S. 1890)

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