What are backdating scandals

by  |  29-Nov-2019 14:51

It was the pseudo-scandal launched by the Wall Street Journal's investigative unit, after its reporters began following up on an academic report that demonstrated many executive stock options awards were too well-timed to be plausible.

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.

The academics concluded that something funny was going on.

The companies were awarding the options later but then marking the awards to earlier dates, when the stock's price was low.

But the resulting investigation saw Apple's former financial chief Fred Anderson and ex-general counsel Nancy Heinen forced to settle with the SEC for a few million dollars apiece without admitting wrongdoing.

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