Shareholders of Intel ( INTC) have narrowly defeated a proposal to make the company expense its options.

According to the company, only 47.55% of votes cast were in favor of the measure, just shy of a majority.

Intel, a heavy user of options, has been among the loudest voices resisting mandatory expensing. On May 7, Intel Chairman Andy Grove sent shareholders a hefty packet of materials laying out the case against options expensing, including a Wall Street Journal editorial penned by CEO Craig Barrett and a dense academic commentary from famed Random Walk Down Wall Street author Burton Malkiel and NYU economics professor William Baumol.

On a related front, last week Yahoo! ( YHOO) shareholders shot down a similar proposal to require options expensing by a two thirds majority, according to reports.

The stiff resistance to options expensing shouldn't come as a surprise, given that the accounting change would force Intel to make hefty reductions in its reported profits.

Intel revealed in a recent Securities and Exchange Commission filing that expensing options in its March quarter (using the Black-Scholes method) would have reduced its profits by a full third, cutting net income from the reported $915 million to $617 million.

In 2002, Barrett cashed in nearly $18 million worth of options, many times the value of his $610,000 paycheck. He received another grant of 584,000 options last year with a strike price of $29.33. Though currently underwater, the options would be worth nearly $11 million in 10 years, assuming Intel's stock price appreciates by 5% a year.

This spring, Intel said it's also handed out new stock options intended to help compensate veteran employees for the slide in its stock price. The options were awarded to workers holding previously granted options with an exercise price above $22 a share.

Though votes on options expensing have been at the forefront of the shareholder reform movement this spring, many analysts believe the issue is moot, because the Financial Accounting Standards Board is expected soon to begin requiring companies to expense options. has a revenue-sharing relationship with under which it receives a portion of the revenue from Amazon purchases by customers directed there from