Michael dell options backdating

21 Jun

Cases of backdating employee stock options have drawn public and media attention.Stock options are often granted to upper management.

To be legal, backdating must be clearly communicated to the company shareholders, properly reflected in earnings, and properly reflected in tax calculations.

For instance, public companies generally grant stock options in accordance with a formal stock option plan approved by shareholders at an annual meeting.

Many companies' stock option plans provide that stock options must be granted at an exercise price no lower than fair market value on the date of the option grant.

Options backdating is the practice of altering the date a stock option was granted, to a usually earlier but sometimes later date at which the underlying stock price was lower.

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.