SEC rejects Cisco option option
PrintThink again
Posted in Financial News, 12th September 2005 10:39 GMT
Free whitepaper – Thermal design of Dell PowerEdge server
The Securities and Exchange Commission has rejected attempts by Cisco and other tech companies to reduce the impact of new accounting rules on share options.
The SEC ruled that share options must be accounted for against profits. Share options - where employees are given the chance to buy shares at a set price over a period of time - have played a big role in building fortunes in the IT industry.
Cisco wanted to create a market in staff share options by offering some for sale, on the same terms, to institutional investors. But the SEC decided that this approach would undervalue the options.
The statement from SEC chairman Christopher Cox said that various methods of valuing stock options exist and that over time it would become clearer which are best.
The statement says: "We remain committed to the promotion of competition between different approaches. Ideally, that competition will also lead to further innovation in models used to value employee stock options."
More details on the SEC websitehere.
Analyst Keynote: The Register Agile Data Center Summit
10 Steps to a Successful CRM Implementation
Market Primer: ERP Systems
What Exchange can't do - and Dell can
Enabling The Agile Data Center
Dirty, dirty PCs: The X-rated picture guide
Top 500 supers - rise of the Linux quad-cores
Early adopters bloodied by Ubuntu's Karmic Koala
Sign up, sign up for The Register IT security newsletter