What is wrong with backdating stock options
The executives in the Brocade communication were charged with different counts of fraud including securities fraud and violation of the laws governing securities among others.
Employee stock options are quite crucial to the operation of the organization.
Now there's nothing wrong with stock options — in fact, the whole point of issuing them is to give executives an incentive to work hard to improve the business, and thus the company share price.
SEC Commissioner Paul Atkins has argued that there is nothing wrong with spring-loading.
Di Bernardo says the Internal Revenue Service (IRS) might argue that spring-loaded options are also discount options like backdated options.
But he says that the IRS would have a much more difficult time proving their case, because they would have to prove the âtrueâ market value on the date the spring-loaded options were granted.
We don't get to enforce the accounting standards we wish existed, we have to enforce the accounting standards that do exist,â Taub went on to say, according to Reuters.
Cox made his comments on âspring-loadingâ and âbullet dodgingâ at a Senate Finance Committee hearing in September.