Lie backdating

If the company sets the prices of the options grant well below the market price, they will instantaneously generate an expense, which counts against income.The backdating concern occurs when the company does not disclose the facts behind the dating of the option.Beyond Sarbanes-Oxley, the SEC approved changes to the listing standards of the NYSE and the Nasdaq in 2003 that require shareholder approval for compensation plans.It also approved requirements that mandate that companies outline the specifics of their compensation plans to their shareholders.They also fully disclose this compensation to investors, and deduct the cost of issuing the options from their earnings as they are required to do under the Sarbanes-Oxley Act of 2002.But, there are also some companies out there that have bent the rules by both hiding the backdating from investors, and also failing to book the grant(s) as an expense against earnings.On the surface - at least compared to some of the other shenanigans executives have been accused of in the past - the options backdating scandal seems relatively innocuous.But ultimately, it can prove to be quite costly to shareholders.

All stemming from the practice known as “options backdating.” Options backdating occurs when a company issues stock options on one date, but reports in its financials an earlier issue date to create a “strike” or exercise price equal to the earlier date’s lower price.(To learn more, see .) Cost to Shareholders The biggest problem for most public companies will be the bad press they receive after an accusation (of backdating) is levied, and the resulting drop in investor confidence.While not quantifiable in terms of dollars and cents, in some cases, the damage to the company's reputation could be irreparable.A Real-Life Example A perfect example of what can happen to companies that don't play by the rules can be found in a review of Brocade Communications.The well-known data storage company allegedly manipulated its stock options grants to ensure profits for its senior executives and then failed to inform investors, or to account for the options expense(s) properly.

Leave a Reply

  1. orlando dating for professional singles 11-Sep-2017 09:00

    Don't be shy, I'm very easy-going, so just call my extension number darling. I'd love you to wank off while I talk dirty and splatter your man juice all over them.