Backdating of stock options / Bernard T. Weinstein, editor.

Format:

Book

Contributor:

Weinstein, Bernard T.

Series:

Business economics in a rapidly-changing world series.

Business economics in a rapidly-changing world series

Language:

English

Subjects (All):

Securities fraud--United States.

Securities fraud.

Stock options--United States.

Stock options.

Physical Description:

1 online resource (108 p.)

Edition:

1st ed.

Place of Publication:

New York : Nova Science Publishers, c2010.

Language Note:

English

Summary:

This text highlights the issue of backdating of stock options and its ramifications. Employee stock options are contracts giving employees the right to buy the company's common stock at a specified exercise price, at a specified time or during a specified period, and after a specified vesting period.

Contents:

Intro

BACKDATING OF STOCK OPTIONS

CONTENTS

PREFACE

Chapter 1 STOCK OPTIONS: THE BACKDATING ISSUES

SUMMARY

INTRODUCTION

ILLUSTRATION OF UNDISCLOSED BACKDATING

TYPES OF STOCK OPTIONS

Nonqualified Stock Options

Qualified Stock Options

GROWTH OF STOCK OPTIONS IN THE 1990S

The Omnibus Budget Reconciliation Act of 1993

Higher Marginal Individual Income Tax Rates

Excessive Remuneration"- Section 162(m)

The Stock Market Boom of the 1990s

Cost Accounting Rules for Certain Stock Options

THE EXTENT OF TIMING MANIPULATION OF OPTIONS

THE POTENTIAL COSTS OF BACKDATING

Costs to Shareholders

Costs from Earnings Hits

Costs of Reduced Executive Performance

Costs from Delistings

Costs from the Actions of Bondholders

Costs of Additional Taxes

Costs of Probes, Fines, and Lawsuits

Employees

Bondholders

Taxpayers

KEY LEGISLATIVE AND REGULATORY DEVELOPMENTS

Sarbanes-Oxley Act: Stock Option Disclosure Reforms

SEC's 2003 Requirement of Approval of Compensation Plans

American Jobs Creation Act of 2004 (Section 409A)

FASB Rule for Expensing Stock Options

SEC's 2006 Executive Compensation Disclosure Rules

GATEKEEPERS

Corporate Boards and Compensation Committees

Utside Auditors

Securities and Exchange Commission

Late Filings

The Question of the SEC's Alertness to Misconduct

POTENTIAL POLICY OPTIONS

Improve Enforcement of Timely Filing of Option Awards

Require Same Day Filing of Option Grants

Require Scheduling of Grants of Executive Stock Options

Ban Equity-based Pay for Top Attorneys and Board Members

Increase Shareholder Roles in the Election of Board Members

Eliminate the Cap on Deduction for Executive Pay

APPENDIX A. OTHER FORMS OF TIMING MANIPULATION

APPENDIX B. QUALIFIED STOCK OPTIONS.

Incentive Stock Options

Employee Stock Purchase Plans

APPENDIX C. LITERATURE ABOUT BACKDATING

Academic Studies

Erik Lie

Heron and Lie (article)

Heron and Lie (working paper)

Narayanan and Seyhum

Narayanan, Schipani, and Seyhun

Bebchuk, Grinstein, and Peyer (Lucky CEOs)

Bebchuk, Grinstein, and Peyer (Lucky Directors)

Bernile, Jarrell, and Mulcahey

Wall Street Journal Articles

APPENDIX D. LITERATURE ABOUT OTHER TYPES OF TIMING MANIPULATION

Yermack (Spring-Loading)

Chauvin and Shenoy (Manipulation of Information Flow)

Aboody and Kasznik (Manipulation of Information Flow)

Callaghan, Saly, and Subramaniam (Timing of Repricing)

End Notes

Chapter 2 OPTIONS BACKDATING: THE ENFORCEMENT PERSPECTIVE

Chapter 3 STOCK OPTIONS BACKDATING HEARING-COX TESTIMONY

Chapter 4 STOCK OPTIONS BACKDATING HEARING- LIE TESTIMONY

BACKGROUND ON STOCK OPTIONS AND STOCK OPTION GRANTS

RESEARCH ON OPTION GRANT TIMING

IS OPTION GRANT TIMING ILLEGAL?

CONCLUSION

Chapter 5 STOCK OPTIONS BACKDATING HEARING- OLSON TESTIMONY

I. STOCK OPTION GRANTING PRACTICES HAVE RAISED CONCERNS ABOUT COMPANIES' ACCOUNTING FOR AND DISCLOSURE OF COMPENSATION COSTS

A. Employee Stock Options Can Be a Useful Tool, but Concerns Have Arisen Whether Companies Have Properly Disclosed Their True Costs

B. Changes in Regulatory Requirements Appear to Have Reduced the Incidence of Suspiciously-timed Option Grants

II. THE PCAOB HAS ALERTED AUDITORS TO USE JUDGMENT IN CONSIDERING ISSUES RELATING TO STOCK OPTION GRANTING PRACTICES IN THEIR AUDITS

Chapter 6 STOCK OPTIONS BACKDATING HEARING-READ TESTIMONY

Chapter 7 STOCK OPTIONS BACKDATING HEARING-SCHACT TESTIMONY

THE CFA CENTRE PERSPECTIVE: OPTIONS BACKDATING

ACCOUNTING AND AUDITING PRACTICE - WHAT HAPPENED?.

LINGERING CONCERNS

INDEX

Blank Page.

Notes:

Description based upon print version of record.

Includes bibliographical references and index.

Description based on print version record and CIP data provided by publisher.

ISBN:

1-61324-210-7

OCLC:

730517869