H.R. 3574 (108th): Stock Option Accounting Reform Act

Introduced:
Nov 21, 2003 (108th Congress, 2003–2004)
Status:
Died (Passed House) in a previous session of Congress

This bill was introduced in a previous session of Congress and was passed by the House on July 20, 2004 but was never passed by the Senate.

Introduced
Nov 21, 2003
Reported by Committee
Jun 15, 2004
Passed House
Jul 20, 2004
 
Sponsor
Richard Baker
Representative for Louisiana's 6th congressional district
Party
Republican
Text
Read Text »
Last Updated
Sep 07, 2004
Length
11 pages
Related Bills
S. 1890 (identical)

Referred to Committee
Last Action: Nov 19, 2003

H.Res. 725 (rule)

Agreed To (Simple Resolution)
Jul 20, 2004

 
Full Title

To require the mandatory expensing of stock options granted to executive officers, and for other purposes.

Summary

No summaries available.

 
Votes
Jul 20, 2004 2:26 p.m.
Failed 126/296
Jul 20, 2004 2:35 p.m.
Failed 114/308
Jul 20, 2004 2:42 p.m.
Failed 127/293
Jul 20, 2004 3 p.m.
Passed 312/111

Cosponsors
131 cosponsors (72R, 59D) (show)
Committees

House Energy and Commerce

House Financial Services

Capital Markets and Government Sponsored Enterprises

Senate Banking, Housing, and Urban Affairs

The committee chair determines whether a bill will move past the committee stage.

 
Primary Source

THOMAS.gov (The Library of Congress)

GovTrack gets most information from THOMAS, which is updated generally one day after events occur. Activity since the last update may not be reflected here. Data comes via the congress project.

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Notes

H.R. stands for House of Representatives bill.

A bill must be passed by both the House and Senate in identical form and then be signed by the president to become law.

The bill’s title was written by its sponsor.

GovTrack’s Bill Summary

We don’t have a summary available yet.

Library of Congress Summary

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.


7/20/2004--Passed House without amendment.
Stock Option Accounting Reform Act -
Section2 -
Amends the Securities Exchange Act of 1934 to require an issuer of registered securities to show as an expense in its annual report the fair value of all stock purchase options granted after December 31, 2004, to:
(1) all individuals serving as the chief executive officer of an issuer, or acting in a similar capacity, during the most recent fiscal year, regardless of compensation level; and
(2) the four most highly compensated executive officers (other than a chief executive officer) that were serving as executive officers of an issuer at the end of the most recent fiscal year ("named executive officer").
Defines the fair value of an option to purchase such stock.
Exempts small business issuers from the Act's requirement.
Section3 -
Amends the Securities Act of 1933 to prohibit the Securities and Exchange Commission (SEC) from recognizing as "generally accepted" any accounting principle relating to the expensing of stock options unless it complies with both: (1) specified expense recomputation requirements; and (2) a required joint study by the Secretaries of Commerce and of Labor of the economic impact of the mandatory expensing of employee stock options.
Requires the recomputation and re-reporting of the expense of a stock purchase option that is exercised, to equal the difference between the price of the underlying stock and the exercise price.
Requires the re-reporting as a reduction of the total expense originally required to be reported if the option expires or is forfeited.
Section4 -
Directs the SEC to require each issuer to include in its periodic report more detailed information regarding stock option plans, stock purchase plans, and other arrangements involving an employee acquisition of an equity interest in the company, including:
(1) a discussion, written in accordance with the Plain English Handbook published by the SEC Office of Investor Education and Assistance on the dilutive effect of stock option plans;
(2) expanded disclosure of the dilutive effect of employee stock options on the issuer's earnings per share;
(3) prominent placement and increased comparability and uniformity of all stock option related information;
(4) the number of outstanding stock options;
(5) the weighted average exercise price of all outstanding stock options; and
(6) the estimated number of stock options outstanding that will vest in each year.

House Republican Conference Summary

The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.


No summary available.

House Democratic Caucus Summary

The House Democratic Caucus does not provide summaries of bills.

So, yes, we display the House Republican Conference’s summaries when available even if we do not have a Democratic summary available. That’s because we feel it is better to give you as much information as possible, even if we cannot provide every viewpoint.

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