Backdating of executive stock options

Posted by / 05-Nov-2017 08:22

Backdating of executive stock options

He said it was an error due to a misunderstanding of accounting rules. executives and directors have resigned or been fired after internal reviews of options backdating problems. The company hopes to put its stock options issues in the past, but regulators say they are continuing to probe RIM's options practices. "When a company does an internal review, that helps speed our process, but it's not a substitute for our process," one U. RIM also announced it has appointed two new independent directors and is searching for two others. Balsillie and co-CEO Mike Lazaridis will pay -million each to cover the company's costs of investigating the options problems.

The admission makes RIM the first major Canadian company to get caught up in an options backdating scandal that has swept through the United States, leading to charges against some executives and forcing billions of dollars in earnings to be restated. The special committee report said all option grants, except those to the co-CEOs, were made under Mr.

Extant studies show that stock returns are abnormally negative before executive option grants and abnormally positive afterward.

We find that this return pattern is much weaker since August 29, 2002, when the Securities and Exchange Commission requirement that option grants must be reported within two business days took effect.

Furthermore, in those cases in which grants are reported within one day of the grant date, the pattern has completely vanished, but it continues to exist for grants reported with longer lags, and its magnitude tends to increase with the reporting delay.

We interpret these findings as evidence that most of the abnormal return pattern around option grants is attributable to backdating of option grant dates.

Most employee stock options are, or purport to be, granted “at-the-money,” meaning that the exercise price of the option equals the market price of the underlying stock on the date of the grant.S.) accounting charge because of major problems with stock option grants. Backdating occurs when companies look backward to pick a favourable date in the past to grant options. "We'll be paying particular attention to the question of whether the corporate governance changes disclosed today constitute meaningful reform and whether they are adequate to prevent problems of this nature in the future," he said.James Balsillie, RIM's co-chief executive officer, admitted yesterday his company backdated stock options granted to employees. While RIM's special committee described a number of instances of improper options-granting practices, it said it found no "intentional misconduct" on the part of any director or employee. Securities and Exchange Commission and the Ontario Securities Commission are reviewing RIM. "It's just a road map." Dimitri Lascaris, a lawyer acting for the Ironworkers Ontario Pension Fund, which owns 13,200 RIM shares, filed a lawsuit against the company in January. RIM announced a series of board and executive changes yesterday. Balsillie will remain co-CEO but will give up the title of chairman to an as-yet unnamed independent director, while chief financial officer Dennis Kavelman will leave his position to become chief operating officer.Below are the most common reasons: This site uses cookies to improve performance by remembering that you are logged in when you go from page to page.To provide access without cookies would require the site to create a new session for every page you visit, which slows the system down to an unacceptable level.

backdating of executive stock options-83backdating of executive stock options-38backdating of executive stock options-42

This site stores nothing other than an automatically generated session ID in the cookie; no other information is captured.