May 19, 2004 — Shareholders of Intel Corp. have approved a proposal for the company to treat its employee stock options as a business expense — an act that, applied to 1Q04 results, would have cut its earnings by 17%, according to Reuters.

The 54% in-favor vote at the company’s annual meeting, representing 89% of outstanding shares, was proposed by the United Brotherhood of Carpenters and Joiners of America Pension Fund. Legislation to apply new accounting rules requiring the expensing of stock options, pushed by the Financial Accounting Standards Board, currently is being reviewed in the Senate and US House of Representatives.

The technology industry would be particularly hard-hit by the new rules, since many tech companies have adopted stock options; data from Prudential Financial and Compustat shows that if IT companies in the S&P 500 listing had expensed options in 2003, it would have reduced their overall operating earnings by 38%.