Many shareholders have rallied to defend Jobs' actions on the basis of his overall performance with the company.They have also sought shelter under the banner that Jobs was no accountant, and thus didn't realize the effects that backdating would render. Critics of prosecuting options backdaters, and basically most of the Apple shareholders who've contacted me, believe that as long as the executive has otherwise performed admirably for shareholders, and as long as shareholders have personally been able to profit from a company's share price growth, it's OK to overlook a few failings.Considering that nearly 200 companies have been caught in the swarm of scandal surrounding the backdating of stock options, more people are questioning whether backdating is really such a bad thing.
Free telugu sex chat dating - What is wrong with backdating stock options
It gives the manager instant extra profits on the options.
Apple ( ) shareholders have been particularly unfazed by the revelation that Jobs was not only aware that backdating was occurring, but also intimately involved in picking the dates to which the stock options were backdated.
Outright fraud should be dealt with harshly, while other cases, done in plain sight, but out of supposed ignorance, might deserve more of a financial slap on the wrist.
The theory is that options are an incentive to have management work hard to ensure that the company's value increases, and that its share price grows, so that management and shareholders can profit together in the future.
Backdating, on the other hand, pretends that the strike price was actually set earlier than it was, or at some time when the share price was lower than on the day it was actually granted.
And surely few people had problems with the vilification of Kobi Alexander, the CEO of Comverse Technology ( ) , when he became a fugitive after his backdating scandal broke. While Saint Steve may not have really understood all the accounting mumbo jumbo that goes into play, it's hard to argue that he didn't benefit.The grants he cancelled would have vested over a period of as much as 10 years.In return, he received less risky restricted shares that would vest within three years, and were valued at million.Let the punishment fit the crime I do agree that the extent to which an executive goes to conceal backdating -- like creating fictitious board meetings, as an Apple employee allegedly did in Jobs' case -- should play a role in deciding the size of the penalty imposed.But you don't need an accounting to degree to know that backdating is wrong. Few tears were shed when William Mc Guire, CEO of United Health ( ) , was deposed for his role in backdating that company's stock options. Jobs' only sin, his defenders will say, was that he was an ignorant shmoe who didn't "appreciate the accounting implications" and didn't personally benefit from the scheme.He had led the firm to phenomenal gains over a 15-year period, but perhaps because he was also richly rewarded as a result, it was easier to oust him. As a matter of fact, they argue, he actually cancelled the big 7.4 million share option grant he was given.