Rubén Hinojosa: “I rise as a cosponsor and a strong supporter of H.R. 3574, the Stock Option Accounting Reform Act. Stock options are…”

“I rise as a cosponsor and a strong supporter of H.R. 3574, the Stock Option Accounting Reform Act. Stock options are extremely important to America's economic growth. They allow companies, particularly start-ups, to recruit and retain top-flight talent when the salaries they offer cannot compare with more established competitors. This is particularly important since the majority of the new jobs in the economy come from start-ups, and that issuance of stock options did not lead to corporate corruption. The mandatory expensing of stock options as proposed by the Financial Accounting Standards Board will result in stock options being offered to only the most senior managers, if at all. Requiring the expenses of all stock options will make companies less inclined to offer such options to employees and thereby hamper the ability of companies that currently offer options to attract and retain talented employees. Because options are used extensively by small innovative start-up companies, requiring expensing would have an adverse impact on innovation, economic growth and competitiveness. It will confuse investors, because they cannot be accurately valued and do not reflect a cash cost. The expensing of stock options reflects a desire to reduce all potential liabilities to a single number in a company's earnings statement. However, GAAP earnings are only one measure to which investors should be looking.”