Jeb Hensarling: “H.R. 3574 would prevent the proposed FASB rule from hurting start-ups and other small companies who very often rely on…”

“H.R. 3574 would prevent the proposed FASB rule from hurting start-ups and other small companies who very often rely on stock options as an incentive to hire and retain employees. If FASB is permitted to require these companies to report their options as an expense, the result will be a distorted view of earnings by investors and less confidence in our markets. This bill will help improve the transparency and disclosure of stock options, while not negatively impacting the ability of businesses to provide this valuable incentive to their employees. As our economy continues to improve and investor confidence rises, we must be careful not to place any excessive burdens on private business or act in any way that would reduce confidence in our markets. If expensing options is mandated, I believe inaccurate and certainly misleading information will be produced, leaving investors with more questions than answers about a company's financial statements and economic conditions. Also, Mr. Chairman, studies have shown that companies with broad-based option plans are generally more productive, and I urge my colleagues to support this legislation.”