What is back dating stock options

Rated 4.47/5 based on 856 customer reviews

You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.

That means the company incurs an expense equal to the difference in the share price between the two dates.

Stock options are promoted by their supporters as the most effective way to align executive and employee interests with those of shareholders.

They are supposed to transform executives from fly-by-night plunderers in the mold of former Tyco or World Com executives into rational leaders who make prudent, long-term-oriented decisions with shareholder capital.

Attorney's Office in Northern California has launched a series of investigations and in July issued criminal and securities fraud charges against two top executives at Brocade Communications. National concern about the practice has been spurred by a series of articles in the Wall Street Journal. Companies found to have practiced this could be forced to restate their earnings.

District Attorney's Office has also issued several subpoenas in launching a criminal probe. The typical practice was to record a felicitously timed prior date as the grant date, such as the point when the stock had been at its lowest in recent months, instead of the date when the award was actually granted.

But are options really as great for all parties as many have assumed?

The stock option “backdating” scandal has implicated several (mostly technology) companies over the past few months.

You’d think that shareholders wouldn’t tolerate the use of accounting sleight of hand to compensate executives while bypassing the traditional “selling, general, and administrative” line in the income statement.I count no fewer than 38 top executives at 19 high-tech companies that have bit the dust over this stuff.We're talking top executives at big-name companies like Apple, Altera, Broadcom, Brocade, Cirrus Logic, Comverse, KLA-Tencor, Maxim, Mc Afee, Rambus, Sanmina-SCI, Take Two, Trident, Verisign, and Vitesse. That's serious fallout considering that options backdating is legit as long as the company reports it and accounts for it accurately.Volatility is especially significant: 29% of companies with high volatility appear to have manipulated grant dates, compared to 13% of those with low volatility.New rules under the Sarbanes-Oxley Act have reduced the practice to 10% of the companies granting options.

Leave a Reply

  1. internet dating raw online dating from a to s pdf 23-Dec-2017 11:01

    \n\nSmile because you don't know what to say next.|WinkYou're at a huge party--there's hundreds of people and they're all, for the most part, drunk and ready to mingle.

  2. most popular internet dating 24-Oct-2017 07:33

    We've got so many ways for you to get off on hot phone sex … We'll connect you right now to hundreds of local women, calling from your area and all across the country.

  3. Free adult chat with girl without membersip 30-Sep-2017 10:23

    Chief Justice John Roberts raised the question of precedence, saying, "Every definition that I looked up, prior to about a dozen years ago, defined marriage as unity between a man and a woman as husband and wife," according to court transcripts. Perhaps these women did not have enough power or influence to actually marry, she said.

  4. beatiful dating service 22-Dec-2017 06:07

    Secondly you will need a countersignatory, they must complete and sign Section 10 of the Application form and they are also required to sign one of the photos.