LOUISVILLE--(BUSINESS WIRE)--Aug. 14, 2002--The Board of Directors of United Parcel Service, Inc. (NYSE:UPS) has declared a regular quarterly dividend and approved a management proposal to begin expensing the estimated cost of stock options.
The Board declared a regular quarterly cash dividend of 19-cents per share on all outstanding Class A and Class B shares. The dividend is payable on Sept. 10, 2002, to shareowners of record on Aug. 26, 2002.
The expensing of stock options will take effect with the next grant of options, scheduled for April 2003. UPS has emphasized stock compensation for many years through annual incentive grants and, to a lesser extent, options. Under the annual incentive grant program, approximately 30,000 managers and supervisors receive stock based on the level of company profits.
"We have a long history of using stock compensation as a means to motivate our people and align their interests with those of our shareholders," said UPS Chairman and CEO Mike Eskew. "The significant majority of our stock compensation is in the form of outright grants, which have been reflected as expense in our income statements for decades. As a result, adding stock option expense will not have a major impact on our total compensation expense nor on our earnings."
The expensing of options is expected to reduce diluted earnings per share by approximately $0.02 in 2003. By 2006, UPS expects to realize the full impact of adopting the accounting standard and, under current rules, estimates that earnings per share will be reduced by approximately $0.08 in that year.
UPS also announced that its chief executive officer and chief financial officer had certified the accuracy of the company's recent Securities and Exchange Commission filings in compliance with both the June 27, 2002, SEC Order and the Sarbanes-Oxley Act of 2002.