Nasdaq Seeks Investor Approval for Awards

The Nasdaq Stock Market, bowing to pressure from the SEC, proposed Friday requiring companies to get shareholder approval before awarding executive stock options.

“Allowing investors to vote on these plans is not only good corporate governance, but absolutely fair,” said Nasdaq Chairman Hardwick Simmons.

Nasdaq’s recommendations, which also include a requirement that off-the-books partnerships be approved by company boards, now go to the SEC.

The federal agency will issue the proposals--and similar plans to be voted on by the New York Stock Exchange on June 6--for public comment before deciding whether to give final approval.

Currently, companies can set up option plans for executives without shareholder approval if awards also are made to a broad group of employees. Option awards only to executives must be approved by shareholders.

Nasdaq, which lists many of the technology companies that have been most inclined to award options, has for years been the stumbling block in SEC attempts to require shareholder approval of options awards. Technology companies have argued that requirements for shareholder approval would cramp their ability to attract and keep personnel.