STOCKWATCH Stock options are the centre of debate
STOCKWATCH Stock options are the centre of debate
The reporting of stock options was on the tips of tongues at storage vendors Veritas and Hewlett-Packard.
On Friday Veritas said that if it had to include stock options in its expenses it would have reported a net loss of US$237 million for 2002, rather than the $57.4 million profit that the storage software vendor did report.
Under current financial reporting laws in the US, companies have the choice of treating stock options as either an expense or as a footnote to their annual reports at their value cost. Veritas, and many other technology companies, use stock options as a form of employee compensation.
Economists and the International Accounting Standards Board would prefer that companies report stock options as an expense.
If Veritas had reported its stock options it is reported that their loss would have been 58 cents a share in full year net loss. As it is, Veritas reported profits of 14 cents a share.
At its annual general meeting (AGM) Hewlett-Packard (HP) voted down a proposal to add stock options to expenses, joining ranks with Veritas.
Hewlett-Packard also used the general meeting to discuss and vote on a proposal to approve the use of "poison pill" reactions to prevent a hostile take over.
Poison pills are shareholder rights plans that are activated by the boardroom of the company if a hostile take over looks set to happen. If these rights are activated, a take over can become very expensive and time consuming for the hostile buyer.
At the vote 1.19 billion shares voted in favour of the system and 942 against it.
This was the first time in its history that HP held it's AGM outside of its home US state of California.
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