New stock option reporting
In late July, the US House of Representatives passed the Stock Option Reform Act (H.R. 3574), which limits reporting of stock options to those allocated to a company's CEO and its four other highest paid staff. Any company that has been on the public markets for fewer than three years or has less than $25 million in annual revenue would be exempt even from this reporting requirement, which applies to companies incorporated in the US, Canada and Mexico. Of the 339 US and Canadian life sciences companies currently listed on a US stock exchange, only about 38% currently make enough revenue to require this type of reporting, according to an analysis of data from business intelligence provider Revere Research. Biotechnology and technology industry organizations, including Washington-based Bioindustry Organization (BIO) and TechNet, welcomed the passage of the House legislation as supportive of innovative companies that rely upon stock options as employee incentives. BIO's president Carl Feldbaum writes that this legislation, if eventually signed into law, could overrule the mandatory stock option expensing proposed in March by the private standard-setting Federal Accounting Standards Board, and avoid creating “an undue administrative burden on small biotech companies struggling to fund clinical development of new medicines.” An identical bill (S. 1890) was opposed when introduced last November in the Senate and is currently in committee. StL
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