New York (Sept. 1, 2004) -- With the Senate preparing to debate a bill that would stymie a plan by accounting rulemakers to require companies to expense all stock options granted to employees, the head of the Securities and Exchange Commission reportedly urged Senate members to stay out of the debate.
"I believe strongly that FASB's consideration of this proposed standard regarding stock options should be allowed to run its full course,'' SEC Chairman William Donaldson reportedly wrote to Senate majority leader Bill Frist and other senators in an Aug. 19 letter.
The battle over the contentious proposal by the Financial Accounting Standards Board is set to come to a head when the Senate considers a bill that would seriously dilute the board's plan by requiring companies to expense only options granted to a company's top five executives. The bill, sponsored by Rep. Richard Baker, R-La., passed the House by an overwhelming 312-111 vote in July. That measure has wide support from members of the technology community.
Donaldson said that the bill would undermine FASB and "disrupt the independent, private sector accounting standard-setting process," according to reports. He joins a growing list of political heavyweights -- including Federal Reserve Chairman Alan Greenspan and former SEC chair Arthur Levitt -- who have called on Congress to back off and let the board do its job.
While the options bill currently has the support of 26 senators, some members of the Senate, including Banking Committee chairman Sen. Richard Shelby, R-Ala., have vowed to fight the measure. Last month, four senators, led by Sen. Peter Fitzgerald, R-Ill., introduced a resolution reaffirming FASB's purpose and urging the Senate to refrain from interfering with the board's recommendations.
-- WebCPA staff
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