The impact of the options backdating scandal on shareholders


04-Jul-2017 18:31

Toward the other extreme, where the backdating was a result of overly informal internal procedures or even just delays in finalizing the paperwork documenting options grants, not intentional wrongdoing, there is likely to be no formal sanction—although the company may have to restate its financial statements to bring its accounting into compliance with applicable accounting rules.

Thus, backdating can be misleading to shareholders in the sense that it results in option grants that are more favorable than the shareholders approved in adopting the stock option plan.The other major way that backdating can be misleading to investors relates to the method by which the company accounts for the options.Until very recently, a company that granted stock options to executives at fair market value did not have to recognize the cost of the options as a compensation expense.Although many companies have been identified as having problems with backdating, the severity of the problem, and the consequences, fall along a broad spectrum.



Discussion of "The impact of the options backdating scandal on shareholders" and "Taxes and the backdating of stock option exercise dates"," Journal of.… continue reading »


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Feb 2, 2015. arising out of the stock options backdating scandal. Gregg A. Jarrell, The Impact of the Options Backdating Scandal on Shareholders, 47.… continue reading »


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The impact of the options backdating scandal on shareholders. Original research. Taxes and the backdating of stock option exercise dates. Original research.… continue reading »


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Curred by shareholders offirms implicated in backdating and compares it. Shivdasani, The Impact of Stock-Option Compensation for Outside Directors on Firm Value. scandal when the Wall Street Journal published a report on its front page.… continue reading »


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