by: Rosen, Corey
Source: The National Center for Employee Ownership
Dozens of companies are under investigation by the Securities and Exchange Commission for backdating stock options. The typical practice was to record a felicitously timed prior date as the grant date, such as the point when the stock had been at its lowest in recent months, instead of the date when the award was actually granted. New research indicates that 29.2% of companies issuing options to executives and/or directors between 1996 and 2002 have grant date patterns that suggest backdating or other manipulative practices (such as 'spring-loading,' the announcement of a grant before good news is released), and 23% of options issued to executives appear to have been backdated or spring-loaded.
Link: Stock Option Backdating and Other Grant Timing Controversies
Publication Date: 2006-07-01