New York (April 9, 2004) -- Despite staunch opposition from some lawmakers and pro-option lobby groups, the options-expensing proposal from the Financial Accounting Standards Board has garnered support from institutional investors.
By a four-to-one margin, some 302 buy-side portfolio managers and research professionals surveyed by Broadgate Consultants Inc., a corporate consultant based here, indicated that FASB’s proposal would improve transparency in financial reporting. More than 70 percent of those surveyed believed the rule would improve corporate governance.
Nearly 85 percent of the survey participants said they were interested in the options expensing issue because GAAP accounting is an important consideration in their decision to invest. And 77 percent said the FASB options proposal should not be modified, Broadgate reported.
Ninety percent of respondents said they would oppose any exemptions from options expensing for start-up or technology companies. In addition, more than 80 percent shrugged off the implication that options expensing would impair a company’s ability to attract top management talent, harm their profitability or impede their ability to attract capital. Nearly 60 percent said that companies shouldn’t abandon stock option plans in favor of other alternative forms of compensation.
-- WeCPA staff
