Dell Shareholders OK Options Expensing Motion

July 15, 2005 ( - Shareholders of computermaker Dell and company management agree that the firm should expense its stock options.

At the 2005 annual shareholder meeting, 50.4% voted for the non-binding resolution proposed by a pension fund to immediately reflect the cost of the options on Dell’s income statement, Reuters reported. Advancing the proposal was the Laborers’ International Union of North America staff pension fund.

Founder and Chairman Michael Dell told shareholders at the meeting in Austin that directors had already decided to start expensing employee options by the first quarter of 2006 to meet US accounting regulations (See  SEC Makes it Official: FASB 123 Implementation Date Moved Back Again ). In a proxy filing, Dell management had labeled the option proposal as “premature” but accepted the idea in principle, according to Reuters.

Dell, along with other tech companies including Cisco Systems and Intel Corp. had originally fought the idea of deducting stock option expenses, arguing that the practice effectively discouraged their use of a vital employee motivator.