The pressure is on…

February 19, 2004

Earlier today, the International Accounting Standards Board announced that it planned to require European companies to start expensing stock optionsnext year. For American investors, the IASB’s decision is likely to give FASB the strength to stand up to opponents of expensing stock options in this country, primarily all the tech companies that treat options like freebies, instead of the form of compensation that they really are. The last time FASB tried to change the rule — back in the early 1990s — they hit a huge wall of resistance from tech company executives who successfully lobbied Congress against expensing. The weak compromise was to provide the details in the footnotes, which few investors bothered to read. Now, it’s time for individual investors to do a bit of our own lobbying!

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