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Technology executives fanned out across Capitol Hill Sept. 21 in a last-ditch effort to drum up support in the Senate for legislation that would limit corporate expensing of employee stock options. Lawmakers backing the bill also rallied in support of the measure, which is aimed at derailing a plan by the Financial Accounting Standards Board to require companies to deduct the cost of options from their earnings. “We need action and we need it now,” said Sen. Barbara Boxer. The California Democrat is co-sponsoring the bill, which would require companies to only expense options granted to the top five executives of a public company. “We need this bill to pass,” said Jeff Solof, director of global communications for Sun Microsystems Inc. “We got no raises, no bonuses. This is what we’ve got and we’re in danger of losing it.” Solof said the FASB’s proposal would devastate the high-technology sector, where options are a common form of compensation. Although the economy is recovering, Sun risks losing its most skilled employees if FASB adopts its proposal, he said. “FASB’s going to screw it up because they don’t get it,” he said. Boxer and Sen. John Ensign (R-Nev.) told the 30 executives that many of their Senate colleagues have largely ignored the issue. “There are some people here that are not well informed,” Ensign said. The lobbying blitz was organized to persuade just such undecided lawmakers to oppose the FASB’s proposal. Coordinating the effort is the American Electronics Association, a high-tech advocacy group based in Washington. The executives met with 25 senators or their legislative aides. Brian Martin, president and chief executive of Nanoventions, a startup based in Roswell, Ga., met with Sen. John Edwards’ (D-N.C.) staff. “They are concentrating on the election and know little about the subject. It was very frustrating,” he said. And while many lawmakers are open to discussing the issue, the technology industry faces an uphill battle. Ensign told the visiting executives that strict opposition to the bill from Senate Banking Committee Chairman Richard Shelby (R-Ala.) means there is little hope for a floor vote this year. He also said Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) would try to stop efforts to attach a measure upending the FASB’s plan to a spending bill. That leaves few options. “From what I understand, Stevens does not want to bring any appropriations bills to the floor that are amendable, so the plan would be to attach legislation to an appropriations omnibus or continuing resolution,” Ensign said. Boxer added that Stevens may be persuaded to accept the legislation if there is a strong show of support in the Senate. That means getting as many as 50 senators to endorse the measure, she said. She also called on President George W. Bush to get involved in the issue. “President Bush said he supports it. Well, now he needs to step up to the plate,” she said. Despite such challenges, Ensign vowed to find a way to get the legislation passed before Congress adjourns. “I am totally committed to finding a vehicle this year.” Meanwhile, advocates of the FASB’s proposal expressed disappointment that the intense lobbying effort to circumvent the board’s plan is continuing. “To the extent that Congress gives the green light to such hiding of expenses on financial statements, that’s bad for the markets and bad for investors,” said Rebecca McEnally, vice president for advocacy at the CFA Institute, a Charlottesville, Va.-based organization that represents certified financial advisers. Donna Block is a senior writer at The Deal , where this article first appeared.

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