Here's a look at companies that have come under scrutiny for past stock-option grants and practices.THIS SCORECARD WAS LAST UPDATED IN SEPTEMBER 2007 AND IS NO LONGER BEING UPDATED. Note: This list contains companies that have disclosed government probes, misdated options, restatements and/or executive departures as of Septmeber 2007.
A growing amount of literature suggests that the practice of executive stock option backdating was common among public firms, potentially for the purpose of strategic trading at the expense of shareholders.
In this paper, I use a sample of 6,835 stock option grants to top executives in the S&P 1500 companies during the period 1999-2007 to show that the rationale behind this manipulating...
[Show full abstract]The widespread practice of backdating executive stock options has drawn strong criticism of the public and also serious attention of the regulators.
Other than pure luck and insider manipulation, I conjecture some backdating is ra- tional.
These results are consistent with the retention hypothesis.
In line with the incentive hypothesis, we find that backdating occurs more for options that are out-of-the-money.
The Wall Street Journal (see discussion of article below) pointed out a CEO option grant dated October 1998.
The number of shares subject to option was 250,000 and the exercise price was (the trough in the stock price graph below.) Given a year-end price of , the intrinsic value of the options at the end of the year was (-) x 250,000 = ,750,000.
Steve Jobs did not benefit from the discontinued practice of stock-option backdating at Apple, a company board committee led by board member and former Vice President Al Gore reported at the end of December.