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.
« Pentagon Gets Recommendations for Beefed up 401(k) Plan