Sen. Barbara Boxer, D-Calif., said a bipartisan group of senators already is mapping out a strategy to prevent the Financial Accounting Standards Board (FASB) from possibly forcing companies to treat stock options as expenses, a move that would greatly diminish their use.

When companies grant stock options, they are "giving people a piece of the dream,'' Boxer said. "We can't stand by and let accountants wearing green eye-shades decide who is going to get the American Dream."

Boxer spoke at a lunch for some 60 senior executives participating in TechNet Day, an annual lobbying drive that brings tech executives to Washington. The group met both with Bush administration officials and lawmakers on Capitol Hill.

TechNet's legislative agenda calls for litigation reform, increased spending for education and basic research and more tax breaks for research and development. But the primary focus was on stock options.

An option gives the holder the right to buy or sell stock, at a specified price, by a specific date. If the right to buy shares is set at a low price and the stock goes up, then the option holder can make a very large profit.

During the 1990s, options became wildly popular, especially with young companies that could not afford big salaries. By 2000, about 90 percent of all large publicly traded companies offered some type of stock-option program, and high-tech companies used them as the key component in most executive compensation packages.

In 1993, FASB, a private group that sets accounting standards, considered rewriting the rules for options. The board said an options grant should be counted as an expense, just as paying a salary to a worker counts as an expense that lowers earnings.

The board believed such a change would give shareholders a more honest picture of a company's finances, but executives said it would discourage option grants.

To block FASB, a coalition of lawmakers, led by Sen. Joseph Lieberman, D-Conn., threatened to strip the board of its standard-setting power. FASB backed down, though many reformers complained bitterly that Congress should not have injected itself into the accounting profession's decision-making process.

In late 2001, the options debate flared up again when Enron Corp. plunged into bankruptcy. Many Enron critics said the desire to cash in stock options drove Enron executives to inflate earnings. Throughout 2002, as more and more accounting scandals erupted, reformers again called for the expensing of stock options.

On Tuesday, FASB's new chairman Robert Herz told a House Energy and Commerce subcommittee that he would push for options expensing. "We are in the change business," Herz said. "We are going to do what we think is right," regardless of political pressure.

Herz is one of seven board members. They have not yet spelled out when or how they might act.

Boxer said granting options is "how our high-tech companies attract the best and the brightest,'' and if FASB tries to clamp down on the practice, "I won't stand by and see it taken away."

She said she is working with Sens. Lieberman, George Allen, R-Va., and Michael Enzi, R-Wyo., "to prepare a strategy" to save options.

Asked after lunch about specifics, Boxer said the senators have not yet settled on a plan, but believe congressional action is justified because FASB derives its standard-setting power from the Securities and Exchange Commission, which is a creation of Congress. While FASB may focus only on accounting principles, Congress must look at the broader picture, she said.

"Of course there is a role for Congress to play," she said. FASB officials "say this is just an accounting issue, and they are not charged with taking into account its impact on the stock market or what happens to employees and companies. But we have to take a broader look."

Jim Barksdale, co-founder of TechNet and former chief executive of Netscape Communications Corp., described options expensing as "the No. 1 issue" for tech executives, and said it would be "a tragedy" if FASB could not be stopped from changing the options accounting standards.

-- Marilyn Geewax