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Numerous Companies Backdated Stock Options in the Wake of 9/

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Lisa
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Posted: Thu Mar 08, 2007 12:04 am Post subject: Numerous Companies Backdated Stock Options in the Wake of 9/

Quote:

From today's Wall Street Journal:

************************************************

COMPANIES SAY BACKDATING USED IN DAYS AFTER 9/11

By Mark Maremont, Charles Forelle and James Bandler

Amid the stock-market swoon that followed the Sept. 22, 2001 terrorist
attacks, dozens of companies granted stock options to top executives
or other employees. Now, some of those companies are saying the
grants were in fact made weeks later---and backdated.

The disclosures are the latest wrinkle in a backdating scandal that
involves more than 140 companies and has resulted in more than 70
firings or resignations of corporate officials. The new information
suggests some executives profited from the market's plunge following
Sept. 11 by manipulating options grant dates.

Stock options give the recipient the right to buy shares at a set
price, typically the stock's closing price on the day the options were
granted. If the stock later rises, the recipient can cash in the
option for a profit. The lower the exercise price, the greater the
potential gain.

Backdating options involves looking for past low points for a stock,
then pretending the options were granted on those favorable dates.
The post-Sept. 11 period was an attractive time for backdaters. The
market had its worst week in more than 60 years, then rebounded
sharply in the fourth quarter.

.....

Scores of companies rushed to grant options during the market's
trough; a Wall Street Journal analysis published in July found that
among a set of 1,800 leading companies the frequency of option grants
more than doubled in late September 2001, compared with other years.

When previously asked about their reasons for granting options in the
wake of the terrorist attacks, some companies said it was pure
happenstance, while others said it was intended top help motivate
executives through the difficult period. But until recently none had
admitted the award dates reflected improper backdating.

.....

Lisa

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BrunoR
Guest

Posted: Thu Mar 08, 2007 12:53 am Post subject: Re: Numerous Companies Backdated Stock Options in the Wake o

Employees should be paid a decent salary and NOT being allowed
to *steal from legitimate (owners!) stock holders.* Where are our
legislators coming down on this issue? You may retort with board
of directors, etc.; However, if a dozen of my friends tell me that
it's allright to hold up my local bank, does it make it right? IMHO!

Lisa wrote:

Quote:

From today's Wall Street Journal:

************************************************

COMPANIES SAY BACKDATING USED IN DAYS AFTER 9/11

By Mark Maremont, Charles Forelle and James Bandler

Amid the stock-market swoon that followed the Sept. 22, 2001 terrorist
attacks, dozens of companies granted stock options to top executives
or other employees. Now, some of those companies are saying the
grants were in fact made weeks later---and backdated.

The disclosures are the latest wrinkle in a backdating scandal that
involves more than 140 companies and has resulted in more than 70
firings or resignations of corporate officials. The new information
suggests some executives profited from the market's plunge following
Sept. 11 by manipulating options grant dates.

Stock options give the recipient the right to buy shares at a set
price, typically the stock's closing price on the day the options were
granted. If the stock later rises, the recipient can cash in the
option for a profit. The lower the exercise price, the greater the
potential gain.

Backdating options involves looking for past low points for a stock,
then pretending the options were granted on those favorable dates.
The post-Sept. 11 period was an attractive time for backdaters. The
market had its worst week in more than 60 years, then rebounded
sharply in the fourth quarter.
....
Scores of companies rushed to grant options during the market's
trough; a Wall Street Journal analysis published in July found that
among a set of 1,800 leading companies the frequency of option grants
more than doubled in late September 2001, compared with other years.

When previously asked about their reasons for granting options in the
wake of the terrorist attacks, some companies said it was pure
happenstance, while others said it was intended top help motivate
executives through the difficult period. But until recently none had
admitted the award dates reflected improper backdating.
....
Lisa

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Lisa
Guest

Posted: Thu Mar 08, 2007 2:03 am Post subject: Re: Numerous Companies Backdated Stock Options in the Wake o

On Mar 7, 1:53 pm, BrunoR <Bru...@nyc.rr.com> wrote:

Quote:

Uh, what?

Lisa

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BrunoR
Guest

Posted: Thu Mar 08, 2007 2:51 am Post subject: Re: Numerous Companies Backdated Stock Options in the Wake o

Lisa wrote:

Quote:

On Mar 7, 1:53 pm, BrunoR <Bru...@nyc.rr.com> wrote:
Employees should be paid a decent salary and NOT being allowed
to *steal from legitimate (owners!) stock holders*. Where are our
legislators coming down on this issue? You may retort with board
of directors, etc.; However, if a dozen of my friends tell me that
it's allright to hold up my local bank, does it make it right? IMHO!

Lisa wrote:

Uh, what?

Lisa

Alright, Lisa, if you need an explanation ;-) ?! People get hired to do
a job.
They do get wages, or a salary (that should be commensurate to what they
are required to do). One should expect any employee to do an excellent job.
Now, if they want options, they can go into the open market and buy them.
What I object to is that I see *all too often*, in companies where I have
my hard earned money invested, employees (you may call them managers)
get options at say $2.90, turn right around and sell the shares for $29.00.
Does anyone call this fair from an investor's point of view. The
investor is
without recourse except for selling his shares. You may think that
investors
get pio'd for backdating stock options versus I think the whole stock
options
racket stinks. It is outright theft from investor's value; Nothing
else-- even
though, many people benefiting from granted options, may not see it my way.

Thanks for listening.

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Lisa
Guest

Posted: Thu Mar 08, 2007 4:53 am Post subject: Re: Numerous Companies Backdated Stock Options in the Wake o

On Mar 7, 3:51 pm, BrunoR <Bru...@nyc.rr.com> wrote:

Quote:

Lisa wrote:
On Mar 7, 1:53 pm, BrunoR <Bru...@nyc.rr.com> wrote:
Employees should be paid a decent salary and NOT being allowed
to *steal from legitimate (owners!) stock holders*. Where are our
legislators coming down on this issue? You may retort with board
of directors, etc.; However, if a dozen of my friends tell me that
it's allright to hold up my local bank, does it make it right? IMHO!

Lisa wrote:

Uh, what?

Lisa

Alright, Lisa, if you need an explanation ;-) ?! People get hired to do
a job.
They do get wages, or a salary (that should be commensurate to what they
are required to do). One should expect any employee to do an excellent job.

CEOs are handsomely compensated for mediocre performance, half the
time.

Quote:

Now, if they want options, they can go into the open market and buy them.
What I object to is that I see *all too often*, in companies where I have
my hard earned money invested, employees (you may call them managers)
get options at say $2.90, turn right around and sell the shares for $29.00.
Does anyone call this fair from an investor's point of view. The
investor is
without recourse except for selling his shares. You may think that
investors
get pio'd for backdating stock options versus I think the whole stock
options
racket stinks. It is outright theft from investor's value; Nothing
else-- even
though, many people benefiting from granted options, may not see it my way.

Options were supposed to link pay to performance, but it isn't working
out that way. Read what corporate governance expert Nell Minow has to
say about stock options.

Quote:

Thanks for listening.

You're welcome.

Lisa

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