Providing for Consideration of H.R. 3574, Stock Option Accounting Reform Act

PROVIDING FOR CONSIDERATION OF H.R. 3574, STOCK OPTION ACCOUNTING REFORM ACT -- (House of Representatives - July 20, 2004)

Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 725 and ask for its immediate consideration.

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Mr. MEEKS of New York. Mr. Speaker, I rise today in support of the rule and in support of the Stock Option Accounting Reform Act. This bipartisan legislation has widespread support on both sides of the aisle. This bill is all about maintaining the leadership role of the United States in emerging industries such as high technology and biotechnology and by recruiting and sustaining the best available workforce. This bill is about giving employees an incentive to be the best that they can be and encouraging small companies, not stifling them.

Mr. Speaker, this legislation ensures that the rank-and-file employees who have benefited from broad-based stock option plans in the past can continue to reap these benefits in the future. Broad-based employee stock option plans benefit middle-class and younger workers who have taken a chance on smaller companies right out of school with the opportunity and promise to grow with that company and share in its success professionally and financially.

In my congressional district, companies such as American Airlines, Verizon, Time Warner and Jet Blue are just a few of the companies that provide stock options as a benefit to their employees. And throughout this debate, some have claimed that stock option benefits only benefit senior corporate executives. The facts say otherwise; 14.6 million American workers held stock options in 2002, representing 13 percent of private sector workers nationwide. Eighty-five percent of stock options are held by nonmanagement workers, and one out of eight employee option-holders is either a union member or married to someone who is. And 39 percent of the employees earning stock options earn only $30,000 to $75,000 a year.

Meanwhile, this bill is also about combating abuse in executive compensation. The bill immediately requires the expensing of all stock options given to the top five executives of a company, but exempts small companies from this requirement for 3 years so that they do not get penalized disproportionately, a balanced and fair compromise.

There are undoubtedly reservations about having Congress enact accounting laws, and I share these reservations and counsel that we should be prudent in our approach. However, the granting of stock options to certain employees in the early and growth stages of a company, particularly in a technological industry, has been a critical component and the success of many technological companies and technological innovations that many Americans utilize, including the devices we carry around with us in the House.

Mr. Speaker, this is bipartisan legislation which reflects the kinds of issues that this Congress needs to address to jump-start our economy with quality jobs for all of American workers. I urge my colleagues to join me in voting for this bill.