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Stock market exec attacks Europe on accounting standards

The vice chairman of Nasdaq Stock Market Inc., in a letter opposing stock option expensing, charged that European support of the convergence of accounting standards is an attempt to “lower America to their own pitiful level of innovation and labor mobility.”

Europeans see “options as unfair competition and need to pull us down to their own miserable levels of opportunity and performance,” Nasdaq Vice Chairman Alfred Berkeley wrote in a letter to the Financial Accounting Standards Board.

Berkeley also had harsh words for accountants, whom he called the “shareholder's rights crowd,” and the media (“wage-slaves to mature, consolidated media empires”), which he contends are wrongly supporting the move to expense stock options.

However, Nasdaq said it did not agree with Berkeley's sentiments.

“While we believe stock options are an important tool in fueling economic growth, Mr. Berkeley did not express his views appropriately,” a Nasdaq spokeswoman said.

Berkeley was not immediately available for further comment. His letter comes as the FASB, a U.S. accounting rulemaker, collects public comments on an International Accounting Standards Board (IASB) proposal to make companies expense stock options.

The move by London-based IASB, which is developing global accounting rules, would force companies to treat stock option costs as a regular expense.

Technology companies, which generously doled out those options during the Internet bubble, would be hit hard by the move to expense stock options. Nasdaq, with a heavy number of technology companies on its roster, has long opposed expensing stock options.

“America helps itself by encouraging broad ownerships of equity,” Berkeley wrote. “What America needs to avoid is the stultifying lack of opportunity that characterizes Europe and much of the world.”

Nasdaq Chairman Hardwick Simmons has said expensing stock options could hurt small companies that do not have earnings, but need to attract and pay qualified employees.

“We could not have built Nasdaq without stock options,” Simmons said last year. “It's extremely important for us that we keep them.”

The Financial Accounting Standards Board is soliciting comments on the subject until Feb. 1, and then will discuss whether it should change the rules in the United States. Currently, companies have the option of treating stock options as an expense or simply disclosing them in the footnotes of their annual report.

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