When is options backdating legal Vidiochat frii love com

How about, instead of saying you got your stock options granted today, when the stock is 0 a share, we claim you got the options three months ago, which instantly gives you a /share profit?That’s an extra

How about, instead of saying you got your stock options granted today, when the stock is $100 a share, we claim you got the options three months ago, which instantly gives you a $15/share profit?That’s an extra $1,500 in walking-around money—and, of course, you don’t tell the shareholders any of this.

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How about, instead of saying you got your stock options granted today, when the stock is $100 a share, we claim you got the options three months ago, which instantly gives you a $15/share profit?

That’s an extra $1,500 in walking-around money—and, of course, you don’t tell the shareholders any of this.

The right way: being a visionary leader who inspires others to do such a fantastic job of keeping customers happy that the company’s stock price goes through the roof, thereby increasing both shareholder value and the value of one’s own compensation package.

The wrong way: deceiving shareholders and regulators about the value of stock options through a little trick called options backdating.

,500 in walking-around money—and, of course, you don’t tell the shareholders any of this.

The slight upside of making extra money isn’t worth the hassle of spending months or years fighting a battle with the SEC.

(In the real world, we would be adding several zeros to the end of all these numbers, but I’m keeping it simple for the purposes of conversation.) Why shouldn’t an executive take such a deal? 1) It’s dishonest and 2) it’s incredibly easy to get caught. Because they can pay compensation without 1) incurring a compensation expense (which has the effect of lowering earnings) and 2) disclosing to shareholders what they are paying their employees.

The Securities and Exchange Commission has seen it all, and options backdating are among the simplest, most obvious ways of scamming the system.

To qualify as an ISO, an option must have an 'option price [] not less than the fair market value of the stock at the time such option is granted.' I.

Consequently, options granted at a discount would not qualify, and are subject to income tax and Federal Insurance Contributions Act (FICA) withholding.

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