Option backdating list positive dating uk
Plenty of companies have conducted internal investigations that have resulted in the restatement of earnings, the firing of executives, and other disciplinary action.Yet self-policing of this issue creates some interesting results.With a lower exercise price, this makes the options “in the money” when granted and therefore the executive is already in a profitable position.So if it’s just a matter of selecting a grant date that gives an executive the highest level of compensation, why not be upfront about it and follow the proper rules? Backdating Isn’t Always Illegal Believe it or not, the backdating of stock options can be legal, provided that the company follows certain rules.So why not just grant stock options that are “in the money” from the start and not play around with the grant dates?
The exercise price of options affects the basis used to calculate compensation expense and capital gains for the recipient.
Federal regulators are so overloaded with investigations, that they are starting to rely on the suspect companies to hire investigators.
Outside law firms are to conduct the investigations and hand over their findings to the SEC or federal prosecutors, who decide if the matters should be pursued.
If there was an advantageous dip in the stock price, that date might have been used as the grant date.
And without access to all the pertinent documentation, shareholders might be none the wiser.
Also, whether or not options are “at the money” or “in the money” may change the tax deductibility of the options.