Eat your heart out, softie.
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General Electric to Begin Expensing Stock Options (Update1)
By Rachel Layne
Fairfield, Connecticut, July 31 (Bloomberg) -- General Electric Co., the world's biggest company by market value, said it will begin expensing the value of stock options this quarter as part of a plan to improve governance and financial transparency.
Chief Executive Officer Jeff Immelt and Chief Financial Officer Keith Sherin also submitted sworn statements to the accuracy of its financial results with the U.S. Securities and Exchange Commission, the company said in a statement.
Immelt has been making changes to improve transparency and corporate governance. Last week, he eliminated a layer of management and split GE Capital into four, making its finances easier to follow. As part of changes announced today, General Electric executives will also be required to buy company stock with option gains and hold that stock for at least a year.
The options change will cut net income by about $30 million, or less than 1 cent a share, in 2002 and will increase to about three cents a share over the next three to four years as the policy change is phased in, the company said in a statement.
About 35,000 employees hold stock options, the Fairfield, Connecticut-based company said. Senior officers will also be required to accumulate and hold General Electric stock equal in value to a specific number of shares equal to a multiple of their salary for as long as they hold the job.
Shares of General Electric fell 14 cents to $31.46 at 12:54 p.m. in New York composite trading. The (sic) had declined 21 percent this year.
quote.bloomberg.com |
