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A Vote for Expensing Options at Amgen

August 07, 2004|Denise Gellene | Times Staff Writer

Amgen Inc. shareholders approved a nonbinding resolution in favor of expensing stock options and withheld a significant percentage of votes from director Jerry D. Choate, the company disclosed Friday in a regulatory filing.

The Thousand Oaks-based company's board of directors had urged shareholders to vote against the stock option resolution and had endorsed Choate.

Amgen and other biotechnology companies use stock options to compensate employees, so their reported earnings would fall if they were required to account for options as a business expense. Amgen's earnings for the first half of 2004 would have been 98 cents a share, versus the $1.09 it actually reported, if it had been required to expense the options it had awarded, the company said in the regulatory filing.

The Financial Accounting Standards Board has recommended that all options be expensed. Amgen said Friday that it was "evaluating its position" on stock options, but that it was premature to act before the FASB made a final ruling.

The shareholder resolution was submitted by the Service Employees International Union and supported by International Shareholder Services, a proxy advisory firm.

ISS also recommended that shareholders withhold votes from Choate, 65, an Amgen director since 1998. ISS said Choate could not be considered an independent director because his daughter and son-in-law had management jobs at Amgen. About 30% of shares were withheld from Choate.

Amgen said Friday that Choate met the standards for independent directors set by Nasdaq, which lists its shares.

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