Backdating stock options spring loading and bullet dodging

Because option strike prices tend to be derived from the grant day's stock price, on the day of granting the option should be "at the money".

Theoretically, executives should benefit from options-based compensation only if their performance has increased shareholder value.

Law360, New York (February 15, 2007, AM EST) -- On Feb.

6, 2007, the Delaware Court of Chancery issued two significant decisions in derivative cases involving allegations of stock option backdating and spring-loading.

[5] For example, SOX demanded that the audit committee be comprised of entirely independent directors [6] and include at least one financial expert.

And we will not be physically present at any of the countless presentations that lawyers and compensation specialists will be making to boards of directors and executive officers in the coming months.

The act of options backdating has become much more difficult as companies are now required to report the granting of options to the SEC within two business days.

This adjustment to the filing window came in with the Sarbanes-Oxley legislation.

This post is based on a recent article, forthcoming in the , by Professor Schipani; H. Around the turn of the millennium, a slew of corporate scandals involving outright fraud, including those at Enron, World Com, Global Crossing, and Adelphia Communications, among others, [1] plagued capital markets and shook investor confidence to the core.

Waterman Collegiate Professor of Business Administration and Professor of Business law at the University of Michigan Ross School of Business. York Professor of Business Administration and Professor of Finance at University of Michigan Ross School of Business; and Sureyya Burcu Avci, University of Michigan Ross School of Business.

Search for backdating stock options spring loading and bullet dodging:

backdating stock options spring loading and bullet dodging-74backdating stock options spring loading and bullet dodging-83backdating stock options spring loading and bullet dodging-15

Leave a Reply

Your email address will not be published. Required fields are marked *

One thought on “backdating stock options spring loading and bullet dodging”