Bill to Limit Options Expensing Introduced

Barbara Boxer (D-CA), Mike Enzi (R-WY) and other Senators have introduced the "Stock Option Accounting Reform Act" to limit the implementation of stock options expensing rules by the Financial Accounting Standards Board. The bill would:

• Limit expensing to the top five named officers of a company.
• Exempt businesses with under $25 million in revenues and $25 in market value, with these businesses retaining that exemption for three years after an IPO.
• Require that expensing ignore volatility and allow companies to "true-up" options expenses for actual experience with forfeitures.
• Mandate a study by the SEC on the impact of expensing, with a special focus on the impact on broad-based ownership.

The bill's prospects are at best uncertain, and options expensing proponents greeted it with derision.