Intel Investors Back Expensing of Options

Intel Corp. shareholders spurned management’s wishes Wednesday and approved an advisory proposal calling on the chip maker to expense stock options in its financial reports.

The measure won only 54% of the vote, but its passage was a major victory for supporters of expensing options. Intel has led the opposition to the practice since it gained popularity after recent corporate scandals.

Intel Chief Executive Craig Barrett said the company would not take any action on the nonbinding vote until the issue was decided by regulators and Congress.

The proposal by the United Brotherhood of Carpenters and Joiners of America Pension Fund was also voted on by Intel shareholders last year, when it received 48% support.

Supporters of expensing say stock option grants should be recognized as an operating cost, and that any financial statements that don’t account for options as costs are not as accurate as they should be.

Intel and other firms argue that it’s impossible to accurately expense something that has no value until exercised, if ever.