New York — The long-standing controversy over the expensing of stock options reached a feverish pitch as critics and supporters rallied following the unveiling of a Financial Accounting Standards Board exposure draft that would require public companies to expense stock options and other forms of share-based payments.

Proponents say that options should be treated like other forms of compensation — as an expense — and doing so would give investors more transparent information. Currently, companies aren’t required to expense options and only need to note them in financial footnotes.

Critics maintain that expensing options would lead to lower profits, stifle innovation, and make it harder for companies to recruit and retain employees. And they contend that the methods for valuing options aren’t accurate.

Rick White, chairman of the International Employee Stock Options Coalition, said that the proposal “will significantly distort companies’ financial statements, making it impossible for investors to compare the financial picture of companies and penalizing rank-and-file workers.” As a result, he maintained that companies would have “little choice but to severely curtail or eliminate broad-based employee stock option plans.”

But Ed Nusbaum, chief executive of Chicago-based accounting giant Grant Thornton, disagreed. “If there were a direct correlation [between stock options and innovation], would the business landscape be littered with the failed ‘dot-coms’ that made liberal use of stock options? There are many other areas in accounting that are subject to measurement uncertainty. That uncertainty does not relieve a company of its obligation to make reasonable estimates.”

However, William T. Archey, CEO of high-tech trade association AEA, said, “FASB’s proposal drives a dagger into the heart of broad-based stock option plans, and will force many companies to discontinue option programs.”

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