Hewlett-Packard Shareholders Vote to Expense Options

However, tech stalwarts, including Microsoft(MSFT Quote), Amazon(AMZN Quote) and Dell(DELL Quote), have already made reforms to appease critics of generous options programs.

In September 2003, Microsoft did away with options handouts altogether, instead giving employees stock as an incentive (the stock will be recognized as an expense). Amazon has largely shifted to using restricted stock and other forms of stock-based compensation.

Dell pledged that it would roughly halve its options grants for fiscal year 2004.

Wednesday's vote at H-P in favor of expensing options is striking given that last year the company's shareholders voted down a similar proposal.

H-P shareowners showed their activist streak on an unrelated issue in 2003, though, when they passed a compensation reform proposal. That measure, a reaction against a $26 million severance package awarded to former president Michael Capellas, urges the board to seek shareholder approval for any severance package worth more than 2.99 times a senior executive's base salary plus bonus.

For the options expensing measure to go into effect, it would need to be approved by H-P's board of directors. "We will continue to carefully debate the matter," said spokesman Brian Humphries.

In regular trading, H-P shares rose 33 cents, or 1.5%, to $22.12. After hours, the stock rose a penny to $22.13.