Newswise — Christopher Cox, chairman of the Securities and Ex-change Commission, recently announced the first charges stemming from the government's investigation into stock options backdating.
It is believed that dozens, if not hundreds, of companies across the country may have improperly manipulated the dates of stock options grants to coincide with low points in the value of their companies' shares. Among the many firms that have been implicated in options backdating is Apple Computer Inc., Comverse Technology, Brocade Communications System, Affiliated Computer Systems and Monster Worldwide Inc., just to name a few.
According to a recent article in Financial Times (http://FT.com), the serious nature of some of the alleged abuses has re-ignited debate on the quality of corporate governance in Silicon Valley and beyond. By engaging in the apparently widespread practice of options backdating, executives at hundreds of companies may have made improper disclosures or fallen foul of well-established accounting rules.
You may be interested in speaking to one of three professors from the Olin School of Business at Washington University in St. Louis on the issue of stock options backdating. They are: Lubomir Litov, assistant professor of finance; Todd Milbourn, associate professor of finance and Richard Frankel: associate professor of accounting.
You may wish to use the WUSTL TV/Radio studio, equipped with ISDN/vvyx technology:Lubomir Litov, Assistant Professor Finance. Prof Litov studies managerial investment choices. He has said the prevalence of backdating stock options doesn't surprise him since options don't always align managers with shareholders, as they are theoretically supposed to. Rather, they would oftentimes allow managers to award themselves substantial stock compensation in a legal manner by means of their control over compensation and audit committees."
Todd Milbourn, Associate Professor of Finance, Prof. Milbourn has written extensively on CEO compensation. He has written about CEO reputation and stock-based compensation, as well as incentive compensation when CEOs can hedge the market. He has also consulted with many large corporations and investment banks on the performance measurement within companies and incentive-based compensation.
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