Option backdating illegal ramayan dating
This fact is often used as a reason to downplay the seriousness of the issue.
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.
But abuse of stock options has been allowed to perpetuate for years.
In all my reading of the backdating scandal coverage, I have yet to see a thorough analysis of the real victims of this scandal: shareholders.
But long-term executive/shareholder interest alignment gets thrown out the window when unforeseen circumstances cause a temporary crash in a company’s stock.
Executives can profit quickly at shareholders’ expense in such instances.
I recall reading somewhere that the board is supposed to represent shareholders’ interests, not the CEO’s!
He suspects that it will turn out much worse than what has been exposed in the media thus far (emphasis added): “Erik Lie, a University of Iowa business professor whose work helped fuel regulatory inquiries into backdating, is expected to release fresh research this weekend showing anomalies that suggest a huge cohort of companies may have played games with their options grants.Simply put, backdating a stock option grant amounts to ripping off shareholders by shortchanging the company treasury.Shares are issued to option holders at artificially low prices and the company gets an artificially low amount of capital in return for its shares.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.20 to recommend they choose that day to grant options.