Taxes and the backdating of stock option exercise dates
His discussion included, among other items, legal ways to backdate stock options.
Logically, we began to wonder why so many companies were illegally backdating options when the risk is so high.
As of October 30, 2006, Glass, Lewis & Company estimates that companies have taken charges totaling more than five billion dollars in fines and restatements.
As we will explore in the coming pages, stock option backdating is anything but a straightforward issue.
Background American stock options are a type of derivative contract that gives the holder the right to buy or company stock at a set price (strike price) during a specified period..
Executive Summary Stock option backdating is a complex issue.
While there are legal ways to backdate stock options, as we found, few companies can properly account for backdated options.