Option backdating illegal compensated dating wiki
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.
I recall reading somewhere that the board is supposed to represent shareholders’ interests, not the CEO’s!
I’ll have more to say about this practice using one of the “poster boy” option abuse companies.
It found evidence of manipulation involving 23% of those grants between 1996-2002, when a new rule required executives to report grants within two business days of receiving them — making backdating far more difficult to achieve.
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.
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.