Dating of stock option

And he never cashed in those options because they were replaced in 2003 by a grant of restricted stock.

CEOs at other companies have been forced to resign for such activities. His job may be saved by the fact that he did not directly profit.

If the stock increased to a share, the holder could exercise the option, pay /share to acquire the stock, then turn around and sell it for /share, earning

And he never cashed in those options because they were replaced in 2003 by a grant of restricted stock.CEOs at other companies have been forced to resign for such activities. His job may be saved by the fact that he did not directly profit.If the stock increased to $11 a share, the holder could exercise the option, pay $10/share to acquire the stock, then turn around and sell it for $11/share, earning $1/share in profit ($1,000 in total).

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And he never cashed in those options because they were replaced in 2003 by a grant of restricted stock.

CEOs at other companies have been forced to resign for such activities. His job may be saved by the fact that he did not directly profit.

If the stock increased to $11 a share, the holder could exercise the option, pay $10/share to acquire the stock, then turn around and sell it for $11/share, earning $1/share in profit ($1,000 in total).

If the stock dropped below $10/share, the stock would be "under water"; therefore, the option would not be exercised, since the stock price is lower than the cost of exercising the option.

You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.

That means the company incurs an expense equal to the difference in the share price between the two dates.

/share in profit (

And he never cashed in those options because they were replaced in 2003 by a grant of restricted stock.CEOs at other companies have been forced to resign for such activities. His job may be saved by the fact that he did not directly profit.If the stock increased to $11 a share, the holder could exercise the option, pay $10/share to acquire the stock, then turn around and sell it for $11/share, earning $1/share in profit ($1,000 in total).

||

And he never cashed in those options because they were replaced in 2003 by a grant of restricted stock.

CEOs at other companies have been forced to resign for such activities. His job may be saved by the fact that he did not directly profit.

If the stock increased to $11 a share, the holder could exercise the option, pay $10/share to acquire the stock, then turn around and sell it for $11/share, earning $1/share in profit ($1,000 in total).

If the stock dropped below $10/share, the stock would be "under water"; therefore, the option would not be exercised, since the stock price is lower than the cost of exercising the option.

You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.

That means the company incurs an expense equal to the difference in the share price between the two dates.

,000 in total).

If the stock dropped below /share, the stock would be "under water"; therefore, the option would not be exercised, since the stock price is lower than the cost of exercising the option.

You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.

That means the company incurs an expense equal to the difference in the share price between the two dates.

dating of stock option-75dating of stock option-40

In general, companies engaging in a classic backdating transaction chose a date when the stock price was at a low point and chose that favorable date as the grant date.In researching this post, I came across a number of recent reports on Henry Nicholas III, the once high-flying CEO and cofounder of Broadcom. While the story was enthralling, I didn't understand what any of it had to do with a federal investigation into stock option backdating.The allegations of illicit sex, drugs, and rock and roll reminded me of the 60s ... Sure, Broadcom had to take a .2 billion charge to fix the accounting mess left by the company's former executives.No one's pay was "inflated" by backdating, unless you assume that the alternative would have been awarding executives exactly the same number of options at less-advantageous prices.Which, of course, you shouldn't assume since any sensible employee can see that if his each stock option is worth less, he should get more of them.Still, given that (a) backdating helps make earnings look better than they are; and (b) Jobs is a huge shareholder of Apple (10.12 million shares, as of last April), how could he not benefit from this behavior? Jobs recommended some backdating dates for other employees.

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