SEC Offers Guidance on Stock Option Expensing
http://www.sec.gov/interps/account/sab107.pdf (Adobe Document) or by clicking here.
The stock options coalition offered a statement today on the guidance which you can read here: http://www.savestockoptions.org/release032905.html or by clicking here.
Cisco did not issue a statement widely, but did offer a statement reactively to media. You can read it here:”We hope that the SEC guidance offered today will allow those who hold stock options to continue to participate in the ownership society and enable U.S. companies to remain globally competitive. This issue is importantto all shareholders and Cisco appreciates the SECs efforts to find a more realistic valuation that will address small, medium and large business concerns. We look forward to continue working with the SEC to further define the specific guidance they have outlined on these very complex issues.”
This issue has been going on for a long time and it appears that this guidance will not be the end of the discussion.
Speaking from my personal soapbox, I’m still a bit confused as to why many of those in government have not championed this issue as a way to make mom, dad, brother and sis as a part of the ownership society. Stock options have helped build some of the great American companies, from Microsoft to Intel to Cisco, etc. Why would regulators and lawmakers take away such a great tool? Perhaps I’ve had too much Kool-Aid (R) here at Cisco, but even looking at it pragmatically, I’m still not sure what is being gained by making stock options an expense when they are already accounted for in EPS. Sigh.