Dozens of companies may be under investigation by the Securities and Exchange Commission for backdating stock options. The Manhattan U.S. District Attorney's Office has also issued several subpoenas in launching a criminal probe.
Opponents of expensing stock options have made some headway in the House on legislation to limit expensing to options for the top five executives of public companies. House Minority Leader Nancy Pelosi (D-CA) has joined 39 other members as a sponsor for H.R.
Proposals to require that Intel and PeopleSoft expense their stock options narrowly lost in recent votes. The closeness of the votes is further evidence that the tide toward expensing has shifted.
The software industry in India is starting to use broad options in a number of companies. In the September 27th issue of The Wall Street Journal, Infosys is profiled in a cover story about Indian software gurus.
The bill to amend the Fair Labor Standards Act to clarify that option awards do not constitute compensation for overtime calculation purposes is now on a very fast track. The "Worker Economic Opportunity Act" has been endorsed by the Administration and leaders of both parties.
According to a report from Pearl Meyer & Partners based on a study of public stock filings, the largest 200 U.S. companies have reduced the use of options to a median overhang of 12.9% of outstanding shares.
In Eyler v. Commissioner, the U.S. Tax Court ruled that a taxpayer (Gary Eyler) must pay a tax of 100% of the transaction plus an additional tax of 5% per year for the five years the tax was delinquent on a $10,000,000 sale to an ESOP.
