gave the thumbs-down to a proposal to expense stock options in a close vote, although the company probably will have to factor the cost into its results before too long anyway. The Financial Accounting Standards Board is currently hammering out standards for how companies should account for options.
Still, the proposed nonbinding reform measure garnered only 47% of votes cast at the company's annual meeting today, according to a
The proposal was submitted by the National Automatic Sprinkler Industry Pension Plan, which owns 168,882 IBM shares.
In a statement in IBM's proxy that sought to rouse support for the measure, the pension fund noted that more than 100 companies in the past few months have decided to expense options, including
, with the aim of providing investors a clearer financial picture.
But IBM's board opposed the reform, noting that it and many other companies are still waiting for FASB to make an official pronouncement on options expensing.
FASB, which recently voted to require options expensing, is expected to issue guidelines on the practice within the year.
IBM's reported net income would have dropped by a stunning 34% last year if it had been required to expense options. According to its annual report, expensing options would have reduced its net income of $3.58 billion in calendar year 2002 to $2.38 billion.
On a per-share basis, diluted earnings would have slid from $2.06 to $1.39.
Shares of IBM were off 8 cents, or 0.09%, to $85.04 in late-afternoon trading.