July 19, 2004
Stock Option Expensing Bill Finalized in Committee; Floor Vote Expected July 20
Late on July 15, The House of Representatives Financial Services Committee filed its approved version of the Stock Option Accounting Reform Act (H.R. 3574), paving the way for an expected vote by the full House of Representatives on July 20. H.R. 3574 would require expensing for the top five executives of a company but not for stock options provided to other employees. The bill would also block a proposal by the Financial Accounting Standards Board (FASB) to require companies to expense all stock options and require a study of the economic impact of expensing.
The Financial Services Committee approved the bill by a bipartisan vote of 45-13 on June 15 and the bill had been expected to come up for a vote by the full House on July 9. However, jurisdictional issues arose concerning whether the House Energy and Commerce committee or the Financial Services committee was the appropriate body to consider the bill before it was brought to a vote of the full House. The House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection held a hearing July 8 on stock option expensing and subcommittee chairman Cliff Stearns (R-FL) was quoted as saying it was not the subcommittee's intent to delay a vote on the bill.
H.R. 3574 has considerable support in the House but stiff opposition in the Senate, including opposition from Senate Banking, Housing and Urban Affairs Committee Chairman Richard Shelby (R-AL). Shelby's committee has jurisdiction over the issue in the Senate and the House bill would be referred to his committee. Shelby has voiced strong opposition to the bill which he characterizes as an attempt to undermine the independence of FASB. For more information, contact Jan Jacobson, Council director, retirement policy, at (202) 289-6700.
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.