Dreier Reaction to FASB Announcement Regarding Stock Option Expensing

March 31, 2004

WASHINGTON, D.C. - Congressman David Dreier (R-CA), Chairman of the House Rules Committee, issued the following statement today in reaction the FASB's proposal to mandate stock option expensing:

"Unfortunately, I cannot say FASB's decision comes as a surprise. It seems they have had their mind made up for quite some time that they would mandate expensing, despite overwhelming evidence demonstrating that it would actually provide misleading information to investors. Shareholders deserve clear and accurate disclosures about a company's use of employee stock options. Expensing will have the opposite result.

"As I have stated previously, I believe it is the wrong decision and one that will only serve to hurt the economic recovery we now have underway. This decision will result in the elimination of broad-based stock option plans, a tool that has proven itself to be a critical job-creation mechanism over the past two decades. That is bad for investors, bad for American workers and bad for our economy overall. I remain committed to working with my colleagues in Congress to arrive at a solution that allows broad-based stock options to flourish."