graphic
graphic  
graphic
News > Companies
graphic
GM expenses options
World's No. 1 automaker also says it will certify its SEC filings by Aug. 14 deadline.
August 6, 2002: 4:44 PM EDT

NEW YORK (CNN/Money) - General Motors Tuesday joined the growing list of companies changing their accounting practices to report stock options as compensation expenses.

The world's biggest automaker, which will begin expensing options in January 2003, also said CEO Rick Wagoner and CFO John Devine planned to comply with the Securities and Exchange Commission's requirement that it certify the accuracy of its financial statements by August 14.

GM said stock options will add to its annual expenses by about $85 million, or 15 cents per share. It said the cost of its annual option grants would grow to about $130 million, or 24 cents a share, in 2005.

Detroit-based GM (GM: up $1.08 to $42.84, Research, Estimates), whose shares rose in midday trading, said about 53,000 of its employees hold options.

"We continue to believe stock options are an appropriate and valuable part of compensation that encourages employees to focus on shareholder return," Devine said in a statement.

Other U.S. companies who have decided to account for options as a compensation expense -- a standard endorsed by consumer groups, Federal Reserve Chairman Alan Greenspan and others but long resisted by business groups -- include Procter & Gamble (PG: up $0.28 to $87.72, Research, Estimates) and General Electric (GE: up $1.35 to $29.65, Research, Estimates).

GM also supported recent reform initiatives, including the Sarbanes/Oxley Act signed into law by President Bush.

The company said it was satisfied with its existing internal controls, including the presence of 10 independent directors on its 12-member board, but said it had "augmented" those controls in reviewing the SEC filings Wagoner and Devine will endorse next week.  Top of page




  More on NEWS
Banker's bonuses: 40% bigger this year
Sprint to slash up to 2,500 jobs
Electric Cadillac may be on the way
  TODAY'S TOP STORIES
Dow surges to 13-month high
Go the distance - Dividends for the long run
Sprint to slash up to 2,500 jobs




graphic graphic

© 2009 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy
Copyright © 2009 BigCharts.com Inc. All rights reserved. Please see our Terms of Use.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc.
Intraday data provided by Interactive Data Real-Time Services and subject to the Terms of Use.
Intraday data is at least 20-minutes delayed. All times are ET.
Historical, current end-of-day data, and splits data provided by Interactive Data Pricing and Reference Data.
Fundamental data provided by Morningstar, Inc..
SEC Filings data provided by Edgar Online Inc..
Earnings data provided by FactSet CallStreet, LLC.