Thirty-three firms -- including Cisco Systems, Intel Corp. and Siebel Systems -- have agreed to the proposal. If it is enacted, their future quarterly reports will tell investors how many options have been granted to executives and employees and detail how those grants will affect the total number of shares outstanding.

The proposal, however, would not require companies to give quarterly estimates of how their profit would change if options were counted as an expense. Many Silicon Valley executives consider the methods for calculating such estimates deeply flawed.

"We think it's misleading information, so we haven't included it," said Rick White, chief executive officer of TechNet. The public policy group is one of two high-tech organizations that helped craft Thursday's proposal.

"Frankly, even people who are trying to expense their options right now haven't figured out a good pricing model, and that's the problem," White said.

Silicon Valley long has opposed any change in the accounting rules for stock options, which tech firms use to pay executives and motivate staff.

The current rules, which do not require that options be treated as an expense, have come under increasing fire in this year's drive for accounting reform. Critics complain that because options have value and are used as compensation, they should count against a company's bottom line. That move could devastate the profit of many companies.

"I don't think that proposal adequately addresses the problem," former U.S. Securities and Exchange Commission chief Arthur Levitt said Thursday. "It's a halfway measure. Either options should be expensed, or they shouldn't. I think they should."

The proposal comes less than a week after an international panel that sets accounting standards for many countries outside the United States proposed forcing firms to count options as an expense.

In response, its U.S. counterpart, the Financial Accounting Standards Board,

will revisit the issue, asking the public for comments on whether the present rules should be changed.

TechNet has sent Thursday's proposal to the standards board, White said.

Most of the information suggested in the proposal already can be found in corporate annual reports, which typically estimate how expensing options would affect profit.

TechNet and the American Electronics Association, which collaborated on the proposal, want to persuade companies to voluntarily place those details in a standardized set of tables in quarterly reports, giving investors more current information throughout the year.

In addition, several companies, including Cisco, already have announced that they will give quarterly estimates of how their earnings would change if options were expensed.

Some advocates of expensing options welcomed the idea of quarterly reporting even if they found Thursday's proposal insufficient.

"It's got good additional information, but one thing I know investors would have liked to see was an estimate of the expense," said Brett Trueman, public accounting professor at UC Berkeley's Haas School of Business.

Chronicle staff writer David Armstrong contributed to this report / E-mail David R. Baker at dbaker@sfchronicle.com.

This article appeared on page B - 1 of the San Francisco Chronicle