SEC Proposes Rule on Option Disclosure

The Securities and Exchange Commission proposed a rule to require that companies disclose the total number of shares to be paid to employees under option plans.

The proposal, which seeks public comment over 60 days, would complement possible New York Stock Exchange and Nasdaq plans to compel companies to get shareholder approval before awarding executive stock options.

The SEC proposal calls for company option disclosures in an annual report or proxy statement. It also would require descriptions of any option plan adopted without shareholder approval.

The proposal would require firms to disclose the total number of shares they plan to issue, the number awarded, and the number to be issued when employees exercise their options, the SEC said.