Shareholders of personal computer maker Gateway voted down on Thursday a stockholder proposal urging the board of directors to treat stock options as an expense.

The proposal, made by the Central Pension Fund of the International Union of Operating Businesses and Participating Employees, was defeated by a vote of 77 percent to 23 percent at Gateway's annual meeting in Sioux City, Iowa, the company said.

The proposal was opposed by the Gateway board.

Last month, the U.S. accounting standards body, the Financial Accounting Standards Board, decided to require all companies to treat employee stock options as expenses. Later this year it will issue a draft of the new rules, including how to value options.

Proponents of expensing stock options, including billionaire investor Warren Buffett, say that giving something of value--options--to employees in return for their services is a compensation expense and should be accounted for as such.

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