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John Berlau, now the Warren Brookes Fellow at the Competitive Enterprise Institute, wrote about "Stock Option Expense Jousting" in yesterday's Washington Times.
One of his purposes is to put the controversy into the context of international affairs:
But messing with the American innovation of stock options could put a damper on America's unique culture of entrepreneurship and risk-taking. And this, in fact, may be what European bureaucrats are counting on.
Most European companies don't utilize broad-based stock options, but they are a crucial part of America's economic engine, instrumental in the growth of companies from Microsoft to Home Depot. This new standard would either reduce earnings for innovative companies or reduce their use of stock options to attract and motivate employees. Either way, "it would reduce our competitive advantage," says John Palafoutas, the American Electronics Association's senior vice president for domestic policy.
Alfred Berkeley, former president of the Nasdaq stock market, also warned in a letter to FASB about the EU's hidden agenda. "Unable to unleash the the creative power of their own economies," he wrote, European bureaucrats "see options as unfair competition and need to pull us down to their own miserable levels of opportunity and performance." For more on the issue, see the pieces I wrote for the Milken Review ("Options Wars") and for CEI ("The Stock Options Controversy and the New Economy.")
posted by James DeLong @ 9:32 AM | General
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