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President Bush is being drawn into a heated, and politically sensitive, battle over corporate accounting of employee stock options. Sen. Barbara Boxer and Rep. Anna Eshoo wrote the president on Wednesday asking him to intervene on behalf of technology companies that want to derail a plan by the Financial Accounting Standards Board to require companies to count employee stock options as an expense. This is believed to be the first time a lawmaker has sought White House intervention in the dispute between accounting regulators and the private sector. White House officials had no immediate comment. The president should “actively support” passage of a bill that would block the FASB’s proposal and instead require companies to expense options only for its top five officials, the California lawmakers wrote, citing Bush’s recent comments about his vision for fostering an “ownership society” for all Americans. “Expensing stock options, as the FASB has proposed, directly threatens rank-and-file worker opportunities to participate in the ownership of the fruits of their labor,” they wrote. Both lawmakers asked the president to “reaffirm this sound position and exert your leadership to get this critical legislation passed in the Senate before the 108th Congress adjourns.” The plea came the same day that a group of technology executives got a cool reception from FASB, which sets standards for accounting and financial reporting, an alternative method to value employee stock options. FASB members appeared skeptical of the plan, but said during a meeting with the group that it would study the proposal, solicit recommendations from its staff and debate the issue further. “The discussion was polite, but there were more disagreements than agreements,” said Jeff Peck, a partner at Johnson, Madigan, Peck, Boland, Dover & Stewart, a Washington lobbying firm, and chief lobbyist for the International Employee Stock Options Coalition, a Washington-based advocacy group. “I didn’t get the feeling they were particularly receptive to the proposal.” Cisco Systems Inc., Genentech Inc. and Qualcomm Inc. developed the valuation system to address what they contend are drawbacks in the standard methods of measuring the worth of options. Called the Fair Value Index-Adjusted model, the technique could be a hit with business. Experts said it could result in costs that are 70 percent lower than under FASB’s proposal, making it more affordable for companies to offer stock option programs. But the coalition of technology companies is not relying solely on its compromise plan. It still wants Congress to intervene. A Senate bill, introduced by Banking Securities and Investment Subcommittee Chairman Michael Enzi, R-Wyo., would bar the Securities and Exchange Commission from recognizing any stock option expensing standard until the agency conducts an economic impact study. It also would require companies to expense options for their five highest-paid executives, but exempts broad-based employee plans. The House overwhelmingly passed a companion bill in July. Enzi’s bill faces opposition from Banking Committee Chairman Richard Shelby, R-Ala., who argues that Congress should not interfere with FASB’s judgment. And with most legislation on hold because of the election year, action on the issue is unlikely. “This is a way to make clear that every effort has been made to meet FASB more than halfway,” Peck said. Copyright �2004 TDD, LLC. All rights reserved.

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