Sens. Carl Levin (D-Mich) and John McCain (R-Ariz.) yesterday reintroduced the Ending Excessive Corporate Deductions for Stock Options Act (S. 1491), which would prohibit corporations from deducting stock option compensation in excess of the stock option book expenses shown on their financial statements.  From the press release:

"Current stock option accounting and tax rules are out of kilter, leading corporations to report stock option expenses on their financial books at one value, and later on using a different value when claiming an expense on their tax returns,” Levin said. “Stock option tax deductions in excess of book expenses often produce huge tax windfalls for companies that pay their executives with large stock option grants.”

See Sen. Levin's detailed floor statement.  For criticism of the prior bill, see the National Taxpayers Union, The Levin-McCain Stock Option Tax Hike: An Option Americans Can’t Afford.