STOCK OPTIONS TRANSPARENCY
Over the past couple of years, much has been written about expensing stock options, particularly in relation to last year's proceedings at the U.S.-based Financial Accounting Standards Board (FASB). Advocates point to mandatory employee stock option expensing as the only tool available to shareholders for accurately understanding how many stock options a company has outstanding.
Mandatory expensing will have an enormous negative impact on the growth and technology enterprises that are key to California and our nation's overall current and future economic well-being. Expensing is clearly designed to end widespread use of broad-based employee stock option plans. That is the wrong goal. Instead, the real need is to give investors clear and accurate information.
That is why I have again introduced legislation, along with my colleague Anna Eshoo, to ensure that investors have accurate and meaningful information about a company’s use of employee stock options. . .whether they are given to high-level executives or to lower-level workers.
The Broad-Based Stock Option Plan Transparency Act directs the Securities and Exchange Commission to improve transparency and disclosure requirements for all publicly traded companies. Investors will clearly understand the impact of employee stock options on share value, while the most innovative sectors of our economy will be able to use broad-based stock option plans to recruit and retain talented workers.
