Stock option backdating restatements mandy moore and dj am dating
Options backdating is the practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.
This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.
In order to lock in a profit on day one of an options grant, some executives simply backdate (set the date to an earlier time than the actual grant date) the exercise price of the options to a date when the stock was trading at a lower level. In this article, we'll explore what options backdating is and what it means for companies and their investors. Most businesses or executives avoid options backdating; executives who receive stock options as part of their compensation, are given an exercise price that is equivalent to the closing stock price on the date the options grant is issued.
This means they must wait for the stock to appreciate before making any money.
Initially attributed to “isolated computer-system implementation difficulties,” the problems ultimately extended to numerous material weaknesses in internal controls.
By early 2006, when Flowserve, a Dallas-based maker of industrial pumps, seals, and valves, finally filed restated reports going back to 2000, Blinn himself had a new outlook. “They’re a fact of life.” Certainly not a very pleasant one.
“It’s almost like a death in the family,” says Trent Gazzaway, national managing partner of corporate governance for audit firm Grant Thornton LLP.
In cases where fraud or some premeditated accounting abuse is at the root of the errors, fear of litigation or prosecution adds to worries about how to correct the numbers and reestablish internal controls.
the much different – and more financially beneficial – tax rules that apply when issuing “at the money” or "out of the money" stock options.(For more insight, see ) Although it may appear shady, public companies can typically issue and price stock option grants as they see fit, but this will all depend on the terms and conditions of their stock option granting program.However, when granting options, the details of the grant must be disclosed, meaning that a company must clearly inform the investment community of the date that the option was granted and the exercise price. In addition, the company must also properly account for the expense of the options grant in their financials.For example, the site cannot determine your email name unless you choose to type it.Allowing a website to create a cookie does not give that or any other site access to the rest of your computer, and only the site that created the cookie can read it.