Intel, the world's largest semi-conductor maker, said yesterday it planned to buck a trend by not counting stock options as an expense, joining a growing list of dissenting high-tech firms.

The company, one of the largest employers in the State with more than 3,000 employees at its Irish plant in Leixlip, Co Kildare, followed Cisco Systems and Microsoft in saying it had decided to forgo treating options as an expense.

Echoing comments from other companies that have already said they would not account for stock options as an expense, Intel chief financial officer Mr Andy Bryant said: "There is no good valuation model to determine the fair value of unexercised employee stock options."

Intel said that, as of June 2nd, its five most highly paid executives held 2 per cent of outstanding options, adding that its goal was to keep dilution related to its options programme to an average of less than 2 per cent annually.

The company also said that its chief executive, Mr Craig Barrett, and Mr Bryant would certify Intel's financial results, in keeping with a US Securities and Exchange Commission (SEC) directive. The SEC edict comes amid accounting and management scandals at some US companies, including Enron and WorldCom.

Technology companies, unlike companies in other industries, count on the issuance of stock options as a major source of compensation for its employees, from executives to rank-and-file workers. In the case of Cisco, its top 25 executives receive less than 6 per cent of the total number of options granted, Cisco chief executive Mr John Chambers said on Tuesday.

Cisco and Microsoft have both said they won't treat options as an expense. But a number of other major companies have recently said they will account for stock options as an expense, including Coca-Cola, General Electric and General Motors.

At the same time, some of those companies have said that accounting for them accurately would be difficult, because the value of stock options varies so much with the market.

In a surprise move, US accounting rule-makers, the Financial Accounting Standards Board (FASB), on Wednesday agreed to explore the impact of requiring companies to disclose stock option expenses on their income statements, in a bid to pull that data out of footnotes to regulatory filings and place them before the eyes of investors.

The FASB's move came as it tentatively agreed to amend rules so that companies that opt to expense options can choose between a few alternative accounting treatments.

Many tech heavyweights have already weighed in on the issue, with Cisco's Mr Chambers arguing that accounting for the value of options on the income statement is far from accurate.

Now, when companies report the effect of stock options, they use complex mathematical formulas, with the most popular one being the Black-Scholes method.

In Intel's case, in the mid-1990s it made stock options available to all full-time employees. In 1968, when the chipmaker was founded, it granted stock options only to its professional staff. - (Reuters)