PracticeConsultingResistance to share option plan grows

Resistance to share option plan grows

A resounding majority of business leaders say Britain should not adopt plans to change the way share options are calculated, according to a new research.

More than four out of five respondents to a survey conducted by the not-for-profit share investment scheme ProShare said that the UK would be disadvantaged if the proposals were adopted in isolation.

One respondent said: ‘The proposals focus too much on investor protection and not enough on encouraging value creation. As an investor I want a balance and I feel the proposals are against my interests.’

Another investor said the plan would damage his interests: ‘They will artificially depress profits, which could restrict dividends and make the share price fall.’

Results of the survey follow a forum organised by ProShare last Friday in a bid to encourage discussion on the controversial proposals between the Accounting Standards Board and industry.

ASB chairman Mary Keegan told the gathering last week that the plan would move forward on an international consensus basis only to avoid creating an uneven playing field.

In direct contrast to Keegan’s comments, one respondent said: ‘The proposal will make the playing fields unplayable. At their best they are unnecessary, at worst they are damaging for private companies.’

However, Diane Hay, chief executive of ProShare, said: ‘The ASB’s response is encouraging. It’s essential that UK companies can compete globally to attract and retain the most talented people.’

Keegan also promised her audience that one of the main concerns for business – the issue of calculating shares from vesting date instead of grant date – would be given serious consideration.

Representatives at the forum included Barclays Bank, Logica, PricewaterhouseCoopers, Railtrack, Tate & Lyle and British Airways, among others.

Links

Companies toughen stance on options

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