Stock Option Plans May Face New Hurdle
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The New York Stock Exchange expects to propose a new standard next year on when to require shareholder approval of employee stock option plans, in a potential victory for institutional investors who have sought a greater voice in executive option packages.
The proposal is likely to base the need for a shareholder vote on the number of shares to be issued under an option plan--a criterion that recognizes the way stock options can dilute the stakes owned by existing shareholders.
It would be a switch from the NYSE’s previous approach, which has required shareholder approval based on how many company employees are eligible to get options.
The prospect of a new procedure for option packages at Big Board-listed companies was disclosed in a letter from the NYSE to the Securities and Exchange Commission.
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