IBM Shareholders Vote Not to Expense Options

IBM Corp. shareholders rejected a proposal on Tuesday to treat stock options as an expense in financial statements, five days after stockholders at Apple Computer Inc. approved such a switch.

The initiative, which IBM management opposed, got 47% of the vote, the company said.

IBM’s $3.58 billion in net income last year would have been cut by $1.2 billion, or 34%, had options been treated as a cost.

Current accounting rules allow companies to estimate the cost of options in footnotes to income statements, rather than recognizing them as a formal expense. But U.S. accounting-rule makers, under pressure from investors and regulators, are moving closer to forcing companies to book options as costs.

Shareholders of another company, toolmaker Black & Decker Corp., on Tuesday approved a resolution requesting the company’s board to consider expensing the cost of future stock options, the firm said.

Separately on Tuesday, IBM boosted its quarterly cash dividend to 16 cents a share from 15 cents. IBM has raised its dividend eight times since 1996, for a total increase of 156%.

IBM shares rose 54 cents to $85.66 on the NYSE.

Black & Decker gained 93 cents to $41.05 on the NYSE.