ASB wants details of directors' deals: Firms urged to reveal value of share options
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.COMPANIES are being asked to improve disclosure of directors' share options - including revealing the exercise price and the current market price of their shares - in an edict issued yesterday by the Accounting Standards Board.
The board recommends that companies give details of the number of share options granted and exercised during the year, with the number outstanding at the beginning and end of the year, for each director.
Companies should also disclose the option price, together with the market price of the company's shares, both at the date the option was exercised and the time the annual report was prepared.
Improved disclosure would make it easier for shareholders to calculate how much directors could gain from share options.
Some companies already disclose the number and exercise price of options - although it is not required by law - but few show the market price of the shares.
The ASB has been unable to make the recommendations mandatory, however.
Its lawyers have advised that, unless the benefit can be quantified - and the ASB considers that too complicated - companies cannot be forced to make the disclosure.
David Tweedie, the ASB's chairman, said the Stock Exchange or the Department of Trade and Industry would have to make disclosure compulsory, although they are unlikely to do so.
Comments on the recommendations are invited by 8 July.
The ASB's urgent issues task force, which considers controversial accounting treatments that are not yet covered by accounting standards, also ruled on the treatment of reverse premiums - incentives offered by landlords to persuade tenants to take up space.
The issue came to prominence when Pentos, the book and stationery retailer, revealed that all its profits in 1992 were due to taking such reverse payments directly to profits.
The ASB says such payments should be spread over the term of the lease and that results from previous years should be adjusted, if required.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments