This all but eliminated the opportunity for senior management to engage any meaningful options backdating. Is there perhaps some middle ground that might be more appropriate to take with these senior officers and the backdating issue? Although many companies have been identified as having problems with backdating, the severity of the problem, and the consequences, fall along a broad spectrum. And McGuire is a celebrated steward of the company. As an economic and practical matter, backdating and cherry-picking dates with the lowest market price of the underlying stock may be evidence that the options granted were not reasonable compensation, because the grant of the options would not be performance based. Many companies' stock option plans provide that stock options must be granted at an exercise price no lower than fair market value on the date of the option grant. Imagine if average shareholders could do the same:
More than companies have launched internal reviews or are under government investigation over possible manipulation of stock option grant timing.
Stock option backdating scandal could grow: report
It allegedly failed to inform investors, or account for the options expense s properly. One is that the exercise price of an option generally is presumed to be the market price of the stock on the date the option is granted. See page 5 of the background briefing. The examples and perspective in this article may not represent a worldwide view of the subject. Much more frightening to tech executives is that the Justice Department is bearing down with criminal cases, and has filed two in a period of three weeks. This all but eliminated the opportunity for senior management to engage any meaningful options backdating. The former executives of New York-based Comverse, led by founder Jacob Alexander, had an even more complex fraud going for years, the government alleges: