Sox and backdating
As the penultimate paragraph of the litigation release notes: In other words, the only apparent addition made by the Commission was an insignificant penalty ($7 million is petty cash to someone who retains as the Wall Street Journal notes, "about 24 million stock options that currently could be cashed in for a gain of roughly $800 million, on top of about $530 million in pay he pocketed while running United Health from 1991 to 2006.") and a ten year bar from serving as an officer or director of a public company.Such bars, by the way, are usually for life so ten years is a bargain.
That is, they grant their executives stock options with an exercise price (or price at which the employee can purchase the common stock at a later date) equivalent to the market price at the time of the option grant.And research from the Corporate Library shows that 40 per cent of the companies under scrutiny have common directors.All of this is in line with what I have called the "six degrees of separation theory of corporate governance." The six degrees theory kicks in where directors sit on common boards. For example, director A sits on the board of company RST and also company UVW.-option grants, the role of company directors is coming under scrutiny.The Securities and Exchange Commission is now examining whether directors who sit on more than one company board may have spread the practice of backdating stock-option grants, reports Bloomberg.You may obtain your marriage license at any County Clerks office anywhere in the State of Texas.
You do NOT have to obtain your license for the county in which you live or in the county were the marriage will be conducted.
The back door distance between directors A and B is deemed to be two.
Now, a Wharton business school study found that CEOs with a back door link to someone on the compensation committee received, on average, $US453,688 ($A601,294) more than those without such a connection.
If the company sets the prices of the options grant well below the market price, they will instantaneously generate an expense, which counts against income.
The backdating concern occurs when the company does not disclose the facts behind the dating of the option.
Moreover, for the first time, the Commission has used the clawback provisions in SOX to require an officer to return compensation to a company following a restatement.