Apple and backdating Free midnightadult chat online
Additionally, companies can use backdating to produce greater executive incomes without having to report higher expenses to their shareholders, which can lower company earnings and/or cause the company to fall short of earnings predictions and public expectations.
Corporations, however, have defended the practice of stock option backdating with their legal right to issue options that are already in the money as they see fit, as well as the frequent occurrence in which a lengthy approval process is required.
The lower this “strike price” is, the cheaper the executive can buy the stock.
When these options “vest” after a period of time, the executive can sell them at the new share price.
This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.
Cases of backdating employee stock options have drawn public and media attention.
It allegedly failed to inform investors, or account for the options expense(s) properly.
As “[P]erhaps the biggest catalyst for Apple’s stock could be the release of a cell phone, which has been widely anticipated for months.
However, Apple’s former CFO Fred Anderson, who was on Apple’s board, and general counsel Nancy Heinen, did have complaints made against them.
Ultimately, Anderson resigned and Heinen paid a .2 million fine without admitting liability.
Because of how widespread the behavior was, it never presented a realistic possibility that Jobs would lose his, err, job as part of the scandal.
However, it was certainly enough to cause a bit of concern at Apple, considering the crucial role Jobs had played in turning the company around since his return a decade earlier.
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As a result, numerous companies are conducting internal investigations to determine if, when, and how backdating occurred, and are filing amended earnings statements and tax forms to show the issuance of “in the money” options in place of the “at the money” options that were previously reported.