Options backdating scorecard

Rated 3.98/5 based on 585 customer reviews

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.

An October 17, 2006 list is only a couple of days old, it is already out of date, because it omits the recent departures from KLA-Tencor (here and here), Altera (here), Sapient (here) and Safe Net (here).

Executive Summary Stock option backdating is a complex issue.

While there are legal ways to backdate stock options, as we found, few companies can properly account for backdated options.

Charities probably haven't paid much attention to the options backdating scandal that has prosecutors looking at about 120 companies (according to the Options Scorecard in the Wall Street Journal) for evidence that insiders benefitted from stock options with an artificially low price.

Charities don't have stock, much less stock options, so why should they be concerned? Erik Lie at the University of Iowa that demonstrated statistically that a large number of unscheduled options awards from company CEOs fell on dates when the stock price was unusually low, reaching the conclusion that "at least some of the awards are timed retroactively." (On the Timing of CEO Stock Option Awards, , May, 2005).

Leave a Reply