WASHINGTON (HedgeWorld.com)–Amid the complicated parliamentary maneuvering on the Senate floor Monday, preparatory to the unanimous passage of a bill sponsored by Senator Paul Sarbanes (D-Md.) aimed at reform both of the accounting industry and of corporate governance, there was also a flurry of activity by Senators who wanted to add a provision that would push corporations toward the expensing of the stock options that they offer as part of a compensation package. That effort seems, for now, to have come to naught.
Two amendments to this effect came under consideration: one, pushed by Senator John McCain (R-Ariz.), would have required U.S. companies to treat stock options as an expense on their balance sheets if they wanted to treat them as such for tax purposes; another, offered by Senator Carl Levin (D-Mich.) would simply have asked the Financial Accounting Standards Board to look into the issue of the expensing of stock options and to report on its conclusions within a year.
No vote was taken on either amendment, in part due to procedural objections raised by Senator Phil Gramm (R-Texas). “The Senator told me that we should have voted on McCain’s if we’re going to vote on Levin’s,” said Angela de Rocha, the communications director for the Republicans on the Senate banking committee.
The over-all bill, formally S. 2673, “The Public Company Accounting Reform and Investor Protection Act of 2002,” passed 97-0 in the late afternoon but can’t reach President Bush’s desk without clearing further hurdles. This bill is markedly different from the bill the House passed in April, sponsored by Rep. Michael Oxley (R-Ohio), H.R. 3763, “The Corporate and Auditing Responsibility, Transparency, and Accountability Act of 2002.” Although both bills create auditing oversight boards, the Sarbanes bill gives that board a more sweeping set of responsibilities and powers. Such differences will have to be resolved by a conference.
The President believes in the goals of both bills, the White House spokesman said Friday.
“The President believes [that] the Sarbanes bill and the Oxley bill in the House are very close to each other. The House bill is a tough bill; the Senate bill is a tough bill. And he’s looking forward to signing a tough bill into law,” said Press Secretary Ari Fleischer.
“We will see a bill,” that the President can sign, said John Baker, an attorney with the Washington law firm Stradley, Ronon, Stevens & Young, which represents many hedge funds, “and it will look more like the Senate than the House bill.”
Greenspan Vs. Pitt