Does backdating explain
I haven’t seen any evidence to support this claim, though it may exist.Now, I don’t mean to suggest that it is not a problem if companies are not complying with SEC disclosure regulations.This process makes the granted option in-the-money and of value to the holder.This process occurred when companies were only required to report the issuance of stock options to the SEC within two months of the grant date.Geoff’s earlier post frames the backdating issue in terms of the important economic (and legal) questions involved.
Cowen summarizes the state of play on these important economic questions as follows: In any case, the debate over chief executives’ salaries has moved a step forward.
The critics contend that chief executives cheat public shareholders.
But private equity typically pays its top executives very well, even though public shareholders are not a factor.
Personally, I am thrilled to see a column that focuses on the real questions surrounding backdating: (1) Why do firms backdate? and (3) What is the theory of harm, if any, upon which we are going to base civil and criminal prosecutions?
It is remarkable, but not incredibly surprising, how little attention has been paid to these questions in favor of the Gretchen Morgenstern-style rants that Professor Ribstein enjoys dismantling weekly.