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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (172771)	1/31/2003 11:17:35 AM
From: Road Walker	Respond to of 186894

Computer Groups Ask FASB to Drop Proposed Option Expense Rules By Dan Goodin San Jose, California, Jan. 30 (Bloomberg) -- Requiring public companies to treat stock-option grants as an expense against profit would harm investors by introducing inaccurate data into earnings reports and removing worker incentives, computer-related industry groups said. Critics of the accounting industry have advocated such proposals following irregularities at companies such as Enron Corp. The coalition of groups opposed say the requirement would create unreliable results because there is no accurate way to account for them. That would force companies to phase out options, depriving rank-and-file employees of a key incentive, they said. ``Introducing a wildly fluctuating number that has nothing to do with the underlying performance of the company into financial statements would not benefit the investing public,'' George Scalise, president of the Semiconductor Industry Association, said in comments submitted to the Financial Accounting Standards Board. Many publicly traded companies offer employees options to buy stock in the future at the price the shares traded on the day the package was awarded. If the shares rise in value, an employee stands to gain by buying the options at the lower price and selling at a higher price. Uncounted Under generally accepted accounting principles, companies don't have to count options awards against earnings. Advocates of a rule change say it would keep companies from inflating profit by understating expenses and encouraging executives to use improper accounting to boost the value of their options. Proposed changes in accounting rules would distort earnings reports because options don't represent an expense, said the Technology Network, or TechNet, which counts Intel Corp. and Cisco Systems Inc. among its members. The result of such requirements would be the curbing of options grants to all but the most senior executives. ``Companies that offer stock options to most or all employees have experienced significant increases in productivity,'' TechNet wrote in comments submitted to FASB. General Electric Co. and Coca-Cola Co. have voluntarily agreed to expense options in the wake of criticism from some shareholder advocates who argue the grants ought to be treated no differently than other types of employee compensation. Last week Siebel Systems Inc. Chief Executive Tom Siebel, sued by shareholders for receiving options to buy stock at less than the market price, gave up $56.1 million in rights to buy shares of the software maker.