SEC Chair Wants Shareholders to Vote on Option Accounting

SEC Chair Harvey Pitt told the Council of Institutional Investors on September 23rd that he believes shareholders should be allowed to vote on whether companies should expense stock options. Current SEC rules allow companies to exclude shareholder proposals on this topic as part of "ordinary business" matters. However, the SEC staff recently created an exception to that when they ruled that such votes could be required for plans that only compensate executives or that result in material dilution. Pitt has directed the SEC's director of corporate finance to consider a proposal requiring companies to allow votes on this issue.