Telecom and copyright might be pretty much off the main Congressional agenda for the coming legislative session, but techs all-time favorite issue—stock option legislation—is looking better and better.
Although the Federal Accounting Standards Board said last week that it would implement a new policy requiring companies to treat options as expenses as of June 15, 2005, the game aint over. In fact, it might just be getting started. This time for real.
Click hereto read more about FASBs ruling on stock options.
FASBs decision, which was expected, isnt the last word. Tech can go back to Congress, and this time, many observers say, the computer and software industries may get their way. And quickly.
There are a bunch of reasons for this. Some are just part of the way Washington works; sometimes it takes a near miss—one or two votes short of approval—to win passage a year later. Also helping techs chances are the firmer Republican majorities in Congress following the November elections.
"We got halfway through this year," says Rick White, CEO of TechNet, high techs lobbying arm which has been leading the charge on options reform. A bill that would require companies to expense only the stock grants made to top-level executives was passed by the U.S. House but died in the Senate.
White says TechNet can take its case to the Securities and Exchange Commission for review, but hes not optimistic that the commission—rife with political fighting on posturing over who can best protect investors from Wall Streets bad apples—will overrule the actions of the independent body it has charged with overseeing the accounting industry. So tech has to try its luck in Congress.
But where? Talk of easing the accounting requirements enacted in response to Wall Street scandals—the Sarbanes/Oxley act—has circulated pretty freely these past few weeks. Secretary of the Treasury John Snow told the Wall Street Journal that some reform of that measure might be in the works.
Thats unlikely says one securities lobbyist. "Republicans wont let themselves be accused of relieving companies of the responsibility of Sarbanes/Oxley, he says. Stock option relief for tech would be a natural fit, but its probably not going to happen here.