Society of Actuaries Announces Official Launch of Stock Options Research Study–Seeks Company Data Contributions

• For Immediate Release: September 18, 2007
• Kim McKeown
• PR Project Manager
• 847.706.3528

Schaumburg, Ill. The Society of Actuaries (SOA) announced today the official launch of its groundbreaking new study that will investigate the motivating factors contributing to the exercise of stock options. The initiation of the study has been driven by the recently revised Financial Accounting Standard (FAS) 123(R), which had as one of its goals ensuring that financial statements faithfully represent the fair value of stock option plans, among other share-based compensation.

As a critical part of the study initiation, the SOA is currently seeking data contributions from companies that offer stock option plans as part of their overall compensation packages. Interested companies can find instructions for submission of data at: Stock Option Experience Study. Data contributions will be treated with the utmost confidentiality and adhere to all data privacy requirements.

The SOA is pleased to also announce the appointment of a team of prominent researchers in the area of share-based compensation to conduct the study. Jennifer Carpenter of New York University, along with Richard Stanton and Nancy Wallace of the University of California at Berkley, will lead the effort in consultation with a special task force of stock option plan experts recruited by the SOA. The results of the study will be made available on the SOA's Web site.

"With the formal launch of the study, we are excited to officially begin this important undertaking that will significantly expand knowledge in this area. Since the safe harbor approach from SEC Staff Accounting Bulletin #107 will be sun setting as of the end of 2007, it is vital that the marketplace creates alternative and improved solutions," said Terry Adamson, chair of the SOA's Stock Options Task Force.

As well, the study is highly anticipated by the Financial Accounting Standards Board (FASB) in support of its passage of FAS 123(R). According to Robert Herz, chairman of FASB, "When the FASB issued FAS 123(R), it expected that there would be continued study, research and data gathering aimed at further enhancing the valuation of stock options and other stock compensation arrangements of various kinds, and that such efforts could be beneficial for companies, investors and the capital markets. I am pleased that the Society of Actuaries is embarking on an effort of this kind."

Results of the study are expected in fall 2008. Companies interested in contributing data to the study may contact Steven Siegel, SOA research actuary, with questions or for further information.