NEW YORK (CNN/Money) - General Electric Co. announced changes Wednesday that it hopes will enhance corporate governance, including treating employee stock options as an expense.

Fairfield, Conn.-based GE (GE: up $0.60 to $32.20, Research, Estimates) said that it will begin expensing options this quarter. The move will cut 2002 net income by less than $30 million, or less than a penny a share. As the cost is phased in, the expense will increase to about 3 cents a share over the next three to four years, GE said in a statement. More than 35,000 GE employees hold options.

GE also plans to implement a holding period on stock options exercised by senior officers. These employees will be required to buy GE stock with option gains and hold that stock for at least one year. Senior officers will also have to accumulate and hold GE stock equal in value to a specified multiple of their base salary.

The changes, which will be implemented by the end of the year, were made as part of GE's attempt to enhance its governance and financial disclosure, as well as further align senior management's personal interest with the long-term interests of GE shareholders.

GE is the latest company to begin treating options as an expense and follows moves made by Coca-Cola Co. (KO: up $1.79 to $49.94, Research, Estimates), Washington Post Co. (WPO: up $5.85 to $625.00, Research, Estimates) and Bank One Corp (ONE: up $1.46 to $38.91, Research, Estimates).

The company announced the changes at the same time that CEO Jeff Immelt and Chief Financial Officer Keith Sherin signed off on the conglomerate's annual results for 2001 and for the first half of 2002.

"GE is about performance with integrity," Immelt said.