|
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. Cases of backdating employee stock options have drawn public and media attention.〔 While options backdating is not always illegal,〔Taub, Stephen and Cook, Dave (2007). "Backdating Not Sufficient to Prove Fraud", http://www.cfo.com/article.cfm/9028174/c_9024377?f=TodayInFinance_Inside〕 many options in corporations are granted to upper management. Backdating has been called "cheating the corporation in order to give the CEO more money than was authorized."〔quoting professor of securities law at Columbia University, John C. Coffee. (Is Backdating the New Corporate Scandal? ) Marcy Gordon| The Associated Press| 5 June 2006〕 and a way of "rewarding managers when stock prices fall".〔''Pay Without Performance - the Unfulfilled Promise of Executive Compensation'', by Lucian Bebchuk and Jesse Fried, Harvard University Press 2004 (p.165)〕 According to a study by Erik Lie, a finance professor at the University of Iowa, more than 2,000 companies used options backdating in some form to reward their senior executives between 1996 and 2002.〔 In an "uncanny number of cases," the "companies granted stock options to executives right before a sharp increase in their stocks."〔(Backdating Scandal Ends With a Whimper ) By PETER LATTMAN]| November 11, 2010〕 To be legal, backdating must be clearly communicated to the company shareholders, properly reflected in earnings, and properly reflected in tax calculations.〔(Stock Options Scandal Gathers Steam ), By: MATTHEW T. BOOS| Fredrikson and Byron PA| July 2006〕〔Chatman Thomsen, Linda (2006). "Speech by SEC Staff: Options Backdating: The Enforcement Perspective", http://www.sec.gov/news/speech/2006/spch103006lct.htm#foot1〕 The SEC’s opinions regarding backdating and fraud were primarily due to the various tax rules that apply when issuing “in the money” stock options vs. the much different – and more financially beneficial – tax rules that apply when issuing “at the money” or "out of the money" stock options. Additionally, companies can use backdating to produce greater executive incomes without having to report higher expenses to their shareholders, which can lower company earnings and/or cause the company to fall short of earnings predictions and public expectations. Corporations, however, have defended the practice of stock option backdating with their legal right to issue options that are already in the money as they see fit, as well as the frequent occurrence in which a lengthy approval process is required.〔 ==History== In 1972, a new revision (APB 25) in accounting rules resulted in the ability of any company to avoid having to report executive incomes as an expense to their shareholders if the income resulted from an issuance of “at the money” stock options. In essence, the revision enabled companies to increase executive compensation without informing their shareholders if the compensation was in the form of stock options contracts that would only become valuable if the underlying stock price were to increase at a later time. In 1994, a new tax code (162 M) provision declared all executive income levels over one million dollars to be “unreasonable” in order to increase taxes on all applicable salaries by removing them from their previous tax deductible status 4. To avoid having to pay higher taxes, many companies adopted a policy of issuing “at the money” stock options in lieu of additional income, with the idea that the executive or employee would benefit through the option by working to increase the value of the company without exceeding the one million dollar deductibility cap for executive income. When company executives discovered that they had the ability to backdate stock option grants, thus making them both tax deductible and “in the money” on the date of actual issuance, the common practice of stock option backdating for financial gain began on a widespread level. The problem with this practice, according to the SEC, was that stock option backdating, while difficult to prove, could be considered a criminal act 6. One of the larger backdating scandals occurred at Brocade Communications, a data storage company. It was forced to restate earnings by recognizing a stock-based expense increase of $723 million between 1999 and 2004, after allegedly manipulating its stock options grants for the benefit of its senior executives. It allegedly failed to inform investors, or account for the options expense(s) properly.〔(The Dangers Of Options Backdating ) investopedia.com| Curtis, Glenn| 9 February 2012〕 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「options backdating」の詳細全文を読む スポンサード リンク
|