It was just this July that I authored a column praising Securities and Exchange Commission Chairman Christopher Cox for successfully navigating through a number of potentially sensitive issues during his first year on the job.Among one of the examples I cited was Cox’s handling of a number of investigations involving the practice of stock-options granting to executives. Now, just four months after implementing tough new rules on how companies have to disclose executive compensation, the SEC issued a quiet statement on Dec. 22 saying that it would take another look at those rules.
In that release, Cox said that the new requirements will make it easier for companies to prepare statements and for investors to understand the cost of stock options and more closely align the SEC’s requirements with the rules of the Financial Accounting Standards Board, which requires recognition of the costs of equity awards over the period in which an employee works for the award. Stock options often vest three to five years after being granted.
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