Comment Letter to the Financial Accounting Standards Board - Proposed Position

Re: the FASB staff's recent advice to one or more of the "big four" accounting firms that the grant date for financial measurement purposes under FAS 123(R) does not occur until the terms of the grant have been communicated to the employee

September 26, 2005

Via Fax (203) 849-9714

Mr. Robert H. Herz
Chairman, Financial Accounting Standards Board
401 Merritt 7, P.O. Box 5116
Norwalk, Connecticut 06856-5116

Dear Mr. Herz:

The Society of Corporate Secretaries & Governance Professionals submitted formal comments, on September 6, 2005, relating to the FASB staff's recent advice to one or more of the "big four" accounting firms that the grant date for financial measurement purposes under FAS 123(R) does not occur until the terms of the grant have been communicated to the employee. Since then, the FASB staff has issued its proposed position relating to this issue. We fully support the staff's proposal, and would like to offer a few specific thoughts about the proposed position.

The Society of Corporate Secretaries & Governance Professionals (formerly The American Society of Corporate Secretaries) is a professional association, founded in 1946, with over 4,000 members who serve more than 3,000 issuers. Responsibilities of our members include advising corporate boards of directors, their audit, compensation and governance committees and executive management regarding corporate governance and disclosure. Our members provide expertise to their corporations in securities laws, including U.S. and international securities offerings, listing requirements and accounting rules. Our members have been on the front-line in designing and implementing the disclosure and governance enhancements required by the Sarbanes-Oxley Act of 2002 and the related rules of the Securities and Exchange Commission, the Public Company Accounting Oversight Board and the exchanges.

We applaud the Staff for reacting in such a timely manner to the concerns raised by our organization as well as other groups that represent corporate issuers. We were extremely encouraged by your understanding of the issues that the interpretation presented and we believe that the two conditions included in the proposed position are reasonable. The first criteria, that the recipient not have the ability to negotiate the key terms and conditions of the award with the employer, goes directly to the heart of the issue and is one of the primary reasons that we argued that the original interpretation was unnecessary. Because equity grants are generally not negotiated, there is no need to delay the effective date of those grants until the date of the communication. The second criteria, that the key terms of the equity grants be communicated within a relatively short period of time, is also reasonable, and was a condition that we suggested be expressly imposed if you permitted the customary approach to grant date to continue. We support the proposed position and strongly recommend that it be issued by the staff in its existing form.

Please do not hesitate to call on The Society if you believe we can provide useful input on items that are important to corporate issuers. We have designated Stacey Geer, chairperson of our PCAOB subcommittee, as our contact person on accounting matters and she can be reached at 404-249-4445 (stacey.geer@bellsouth.com).

Respectfully submitted,

The Society of Corporate Secretaries and Governance Professionals

By: Stacey K. Geer, Society PCAOB Subcommittee Chairperson

Society of Corporate Secretaries and Governance Professionals
521 Fifth Avenue New York NY 10175
212-681-2000 - Fax 212-681-2005

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