Monthly Archives: October 2002

October 10, 2002

Three items today…

1. NYSE Rule Proposal on Option Plan Approval – We have posted the NYSE proposal filed with the SEC regarding shareholder approval of equity compensation plans at The proposal is not on the SEC web site or in the Federal Register yet.

The SEC said it is expected to be published in the Federal Register this week. The NYSE Pilot expires on October 30th, so the SEC is soliciting comments with the goal of having this proposal in effect by around that date.

2. SEC Open Meeting – Next Wednesday, the 16th, the SEC is having an Open Meeting to consider proposals relating to Sections 303, 404, 406 and 407 of the Sarbanes-Oxley Act of 2002 – relating to annual internal control reports; disclosure regarding whether a company has adopted a code of ethics that applies to certain senior officers; disclosure regarding whether a company has a financial expert on its audit committee; and prohibitions on officers, directors, and persons acting under the direction of an officer or director, from taking any action to fraudulently influence, coerce, manipulate or mislead the auditor of the issuer’s financial statements for the purpose of rendering those financial statements materially misleading. See more @

3. Democrats call for Chairman Pitt to be Removed – Democratic leaders of the House and Senate sent a letter to President Bush asking that Chairman Pitt be removed over his handling of possible nominations to the new Public Company Accounting Oversight Board. See more @

October 9, 2002

The FASB has issued an Exposure Draft on options expensing – with comments due by November 4th. The FASB hopes to amend SFAS 123 by the end of the year – so it would be effective for the financials filed in the upcoming proxy season for companies with 12/31 fiscal year ends.

These changes would provide three methods of transition for companies that voluntarily adopt the fair value method of recording expenses relating to stock options. In addition, companies would be required to provide clearer and more prominent disclosures about the cost of stock-based employee compensation – and include this disclosure each quarter in their Form 10-Qs.

The Exposure Draft is at

October 8, 2002

Biggs No Longer PCAOB Candidate

Chairman Pitt is still under fire – he now has had to retreat from any intimation that TIAA-CREF Chair John Biggs would be the new head of the Public Company Accounting Oversight Board (due to objections from Republicans led by Rep. Oxley) – and he has been chastised by Democrats for meeting with the Goldman Sachs Chairman last week, just before Goldman Sachs was implicated in the allocated IPO investigation. This was before the Congressional report released Saturday that criticized the SEC’s role in Enron (see

See the related Washington Post articles at and

October 3, 2002

It looks like the corporate governance expertise developed over the years at TIAA-CREF will now be spreading through the movement of personnel – as Chairman John Biggs moves to be head of the new Public Company Accounting Oversight Board and Ken Bertsch moves as Director of Corporate Governance at TIAA-CREF to Moody’s Investors Service to become their Vice President and Director, Corporate Governance.

October 2, 2002

Finally, the Justice Department and the SEC are taking action against Enron’s former CFO – see