Can you explain how this afftects company performance or their stock performance ?
2006-11-02 03:40:08 · 2 answers · asked by kate 7 in Business & Finance ➔ Corporations
Howard - thanx for helping lift the brain fog
Cos - interesting use of the dictionary but this was listed under finance & corporations so I need responses related to options backdating in corporate finance.
2006-11-02 04:50:30 · update #1
When an executives are given stock options, they are given the right to buy a given number of shares at a given price. The price is usually the price of the stock on the day the options are granted. The logic of this is that if the executive's actions after the option grant help raise the price of the stock, the executive should benefit. Backdating means that instead of setting the price to be the price of the stock on the day the options were granted, the price is set to be a lower price, for example the lowest price of the year.
Problems are two-fold: 1) The company gets less money for its stock than its entitled to. So, the company is less well off than it should be 2) The executive is not getting the intended incentives
2006-11-02 03:53:14 · answer #1 · answered by Howard T 1 · 1⤊ 0⤋
options means different choices for you to make.Backdating means;for example David was just 26years old when he wanted to run for an election as a state governor,but the law disqualified anybody who was below the age of 30years to run.So David decided to backdate his age to 40years old.However the law had options for anybody who was below 30years and was interested in running for an eletive post.The options were you must be 30years old and above,or you were below 30years old but had once been a deputy governor.
2006-11-02 12:18:10 · answer #2 · answered by chimosco k 1 · 0⤊ 0⤋