Issue Summary
There is continuing pressure to require companies to expense the value of stock options. Much of this pressure comes from the accounting standards setting bodies: the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB).

If stock option expensing is mandated, many high-tech companies will not be able to provide options to rank and file employees, the primary recipients of stock options.

Recent Happenings in Stock Options

• On March 29, 2005, the SEC released Staff Accounting Bulletin (SAB) 107 relating to the FASB's accounting standard for stock options and other share-based payments. In the SEC's press release, Chief Accountant Donald Nicolaisen stated: "The views expressed by the staff are guidance and do not alter any conclusions reached by the FASB in Statement 123R. We will continue to monitor implementation of Statement 123R and will consider the need for additional guidance as necessary.” 
  
  
  • SAB 107
  • SEC Press Release
  • Fact Sheet
  
  
• December 16, 2004 AeA released a statement in response to FASB releasing its final stock options expensing standard (FASB Statement 123 - Share-Based Payment)
  
  
• On November 18, 2004 AeA sent a letter to SEC Chief Accountant, Donald Nicolaisen, regarding FASB's proposed effective date for stock option expensing rules. 
  
  
• On October 13, 2004, the Financial Accounting Standards Board (FASB) voted in favor of delaying its proposed expensing rules for six months.  Read the statement from William T. Archey, AeA's President and CEO, in response to FASB's decision.

• On September 29, 2004, Senate Majority Leader Bill Frist wrote to SEC Chairman William Donaldson to express his concern with FASB's valuation proposal.  Read the statement made by William T. Archey, AeA's President and CEO.

• September 30, 2004, AeA small and mid-sized companies wrote to the U.S. Senate in support of the Stock Option Accounting Reform Act.

• AeA's Sept. 21 Stock Option Fly-In was a huge success. AeA member company employees and executives took the fight to defend stock options to the U.S. Senate and Securities and Exchange Commission. Read about the successful day!
  
  
• July 20, 2004 - AeA Praises House for Passage of Stock Option Accounting Reform Act
  
  
• AeA Urges the House of Representatives to support the Stock Option Accounting Reform Act.  July 7, 2004.

• June 30, 2004 - AeA Comments on FASB expensing proposal
  
  
• On June 15, 2004, the House Committee on Financial Services approved the Stock Option Accounting Reform Act in a vote of 45-13.  Read the Committee's press release.
  
  
• Read about AeA's March 31 Stock Options Fly-In.
  
  
• Statement from William T. Archey, President and CEO of AeA Regarding Financial Accounting Standards Board’s (FASB) Proposal on Equity-Based Compensation. 
  
  
• Financial Accounting Standards Board ("FASB") releases exposure draft requiring expensing of stock options on March 31, 2004.  
  
  
• 2004 Stock Option Priorities  
  
  
• AeA Member Company Executives Lobby Congress and the Securities Exchange Commission on Stock Option Expensing
  Report on AeA's September 2003 CXO Stock Option Fly-In - Adobe Reader required for viewing.  
  
  
• AeA Member Companies Support the Broad-Based Stock Option Plan Transparency Act of 2003
  Letter to Congress from small and medium-sized AeA member companies.
  
  
• AeA President's Message: "Stock Options Expensing: Candid Comments by Bill Archey"
  May 2003  
  
  
• AeA Stock Option Survey Results  
  
  
• ASB Chairman Testifies Before Congress – urges expensing of Options
  March, 2003
  

Information on Employee Stock Purchase Plans (ESPPs)

• Fundamentals of Employee Stock Purchase Plans  (Free subscription required to view article)
  
  
• Cash in the cubicle:  Employee stock purchase plans are worth every dollar  (Free subscription required to view article)

Stock Options In the News

• Silicon Valley's Political Clout, The battle to save stock options, Traditional adversaries in Congress unite against governing board, San Francisco Chronicle, April 5, 2004
  
  
• Dispute Over Stock Options Heats Up, The News & Observer, March 28, 2004
  
  
• Tech Execs Lobby Against Stock Options Proposal, The Atlanta Journal-Constitution, march 27, 2004
  
  Expensing Options: An Overblown Storm, BusinessWeek Online, April 1, 2004
  
  
• Tech Firms Lobby On Options, The Mercury news, March 31, 2004
  
  
• Will Expensing Cost the U.S. Jobs? BusinessWeek, December 30, 2003 
  
  
• Editorial: The best option is to wait to decide on expensing, The Mercury News, September 29, 2003
  
  
• SEC Commissioner Paul Atkins Speaks Out Against Expensing Stock Options

For Members Only

Report on AeA Meeting with Treasury on Next Day Deposit Rules
March, 2003

Related Areas:  

Expensing Issues

This page was last updated on 03/30/05.  
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