Stock options survive Senate

— The Washington Post reports that stock options survived efforts by Democrat Carl Levin and the emotionally disturbed sometime Republican John McCain to severely restrict or eliminate them as part of the Sarbanes accounting fraud bill:

Stock options were a major topic of the debate in the final afternoon of action on the bill. Sen. Carl M. Levin (D-Mich.) described stock options as “stealth compensation” that serves as a “driving force behind the deceptive accounting practices that have bedeviled this nation.”

Levin proposed that the Financial Accounting Standards Board, an industry group that writes accounting rules, be directed to study how to properly account for stock options and act on its findings within a year.

But Sen. Phil Gramm (R-Tex.) objected to Levin’s proposal, saying it was akin to ordering “a fair trial and then a hanging,” meaning that it was aimed at requiring companies to record stock options as expenses. He said it should be considered at another time in connection with other proposals dealing with stock options. Under rules in effect as the debate ended, a single senator could block a vote on any amendment, and Gramm’s objection effectively killed Levin’s proposal.

Silicon Valley voters would be wise to note who’s trying to kill stock options, and who saved them, at least for now.