Intel shareholders vote to expense options
Fifty-four percent of Intel shareholders vote to have the company expense stock options, despite an aggressive campaign by Intel to veto the measure.
The results of the vote, released at the company's shareholder meeting Wednesday, are not binding on the company, but Intel will take the results into consideration, spokesman Chuck Mulloy said. Intel will wait to adjust its stock option policy, if necessary, until after the regulations regarding expensing become clearer. Currently, several proposals for and against expensing are pending in Washington.
Intel has been one of the most vocal companies in the battle over stock options. Following the Enron scandal, shareholders began to request that companies treat options as an expense. Intel and others, however, argued that it is near impossible to put a value on options and that expensing would mean companies would have to cut down on the number of options they give employees.
"We believe this is a deeply flawed method of accounting that will diminish the accuracy and clarity of our financial reporting and could cause real economic harm to Intel, our stockholders, and our economy," Chairman Andy Grove wrote in a letter to shareholders earlier this year. "This is a serious issue that should not be made trivial."
Despite the loss on the options vote, Intel won a vote on a plan that will let shareholders review stock option grant plans annually. Shareholder proposals that would have forced the company to issue restricted stock instead of options and that would have set performance standards that dictated when executives could exercise options failed.