First service backdating stock options
Introduction Stock option backdating is a popular issue in today’s business environment.With recent changes made to the accounting and reporting rules for stock options, a storied array of companies have announced illegal practices, investigations, executive resignations, and much more.The statistics can be staggering: .9 billion in fines, more than 120 companies under investigation.In the coming pages, the history, legal issues, and effects on shareholder value will be explored.Companies will lose top talent, individuals who are key to the company’s growth and success.
Given the recent resurgence of news relating to options backdating, I thought I’d reprint the paper for those who might be interested.
Employee stock options are offered as compensation in two different ways.
Stock options may be offered on a regular schedule, as part of a normal executive compensation package, or unscheduled, as a performance- or inventive-based reward.
Further investigation has revealed the complexities involved with a legal backdating program.
Because of these complexities, many companies are unable to keep all paperwork in line.