Ethics of options repricing and backdating

24 Jun

(In this instance, intrinsic value is defined as the difference between the grant price and the market price of the stock, which at the time of grant would be equal).

So, while the practice of not recording any costs for stock options began long ago, the number being handed out was so small that a lot of people ignored it.

ethics of options repricing and backdating-69

The second method of compensation comes in the form of benefits, such as insurance (life, health, dental, and disability), paid vacations and sick days, tuition and child care assistance, and other miscellaneous perks, such as company cars and expense accounts.Coinciding with this increase in options granting is a raging bull market in equities, specifically in technology-related stocks, which benefits from innovations and heightened investor demand.The process of granting an option that is dated prior to the date that the company granted that option.In this way, the exercise price of the granted option can be set at a lower price than that of the company's stock at the granting date.This process makes the granted option in-the-money and of value to the holder.