Who Gets Stock Options? Debate Heats Up

Do stock options, those potentially lucrative goodies that companies tuck into pay envelopes, benefit only the big execs--or the lesser lights, too? That's the latest fight swirling around a proposed rule requiring that stock-option grants be charged against company earnings. They aren't now.

Corporate critics claim the proposal, by the rulemaking Financial Accounting Standards Board, will hurt high-tech startups that lack profits to pay cash incentives. Key to the debate is who gets this boodle: If it's mainly bosses, the rule's foes could lose sympathy at FASB, which will vote soon on the issue. And presto--both sides of the debate have unveiled studies to bolster their views.

Rule-backer Senator Carl Levin (D-Mich.) flaunts one by Bethesda (Md.)-based Institutional Shareholder Services showing that 97% of the options in 1992 went to 15 or fewer employees in each mf the 5,991 companies it surveyed. And the rule-hating American Electronics Assn. pushes one by ShareData of Sunnyvale, Calif., that has 35% of its 405-company sample giving options to all. The reaction at FASB, says board member Joseph Anania: "These studies have no direct effect on us."

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