The Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), the single-biggest pension-fund manager for academe and research, is pushing the companies in which it invests for more complete and clear financial reporting. TIAA-CREF has urged 1,754 major corporations to account for all stock options as expenses in their financial statements, rather than as merely footnotes to those statements.
John H. Biggs, TIAA-CREF chairman, said in a letter to the corporations that reporting stock options more explicitly would provide “a more accurate account of the company’s costs,” even though in doing so, a company’s overall net income and earnings per share appear lower.
Failing to account for the real cost of stock options on a company’s books creates “a fiction,” said Biggs.
About 95 percent of TIAA-CREF’s equity holdings are in U.S. companies.
