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Stock option backdating bedlam
Author(s) -
Ciesielski Jack T.,
Weirich Thomas R.
Publication year - 2007
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.20287
Subject(s) - stock options , shareholder , business , stock (firearms) , accounting , non qualified stock option , finance , restricted stock , stock market , corporate governance , history , context (archaeology) , archaeology
Now that the dust has settled a bit, we take a closer‐look at the recent stock option backdating scandal. Stock option plans have usually been justified by saying they aligned management's interests with those of shareholders. But the authors point out that by backdating stock options, the board of directors weakens the bond between top management and shareholders. What caused this latest financial scandal? Was it one more example of unbridled executive greed? Or was it mostly sloppy recordkeeping? This article examines the issues, and the future implications for companies. © 2007 Wiley Periodicals, Inc.