Backdating of executive stock options
But how does that relate to hiring prostitutes and drugging customers without their knowledge?Said another way, do the feds really need to dig that deep to find enough rope to hang executives with?
Heinen also exercised and sold 400,000 back-dated shares.In researching this post, I came across a number of recent reports on Henry Nicholas III, the once high-flying CEO and cofounder of Broadcom. While the story was enthralling, I didn't understand what any of it had to do with a federal investigation into stock option backdating.The allegations of illicit sex, drugs, and rock and roll reminded me of the 60s ... Sure, Broadcom had to take a $2.2 billion charge to fix the accounting mess left by the company's former executives.You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.That means the company incurs an expense equal to the difference in the share price between the two dates.Since scans are not currently available to screen readers, please contact JSTOR User Support for access.
The Dating Game, by James Surowiechi, The New Yorker: ..
I count no fewer than 38 top executives at 19 high-tech companies that have bit the dust over this stuff.
We're talking top executives at big-name companies like Apple, Altera, Broadcom, Brocade, Cirrus Logic, Comverse, KLA-Tencor, Maxim, Mc Afee, Rambus, Sanmina-SCI, Take Two, Trident, Verisign, and Vitesse. That's serious fallout considering that options backdating is legit as long as the company reports it and accounts for it accurately.
After all, stock option backdating is all the rage these days.
You'd think they'd be up to their eyeballs in rope.
At the end of the day, Jobs dodged a bullet because of 1) his value to Apple's shareholders, 2) his value to the U. economy, and 3) just plain luck that neither Apple's board nor the SEC found a smoking gun to force them to do something they didn't want to do.