Backdating stock options legal

27 Feb

The total cost to shareholders, in this case, has been staggering.

(For more information, see .) The executives of companies involved in backdating scandals may also face a host of other penalties from a range of governmental bodies.

But ultimately, it can prove to be quite costly to shareholders.

(To learn more, see .) Cost to Shareholders The biggest problem for most public companies will be the bad press they receive after an accusation (of backdating) is levied, and the resulting drop in investor confidence.

The backdating concern occurs when the company does not disclose the facts behind the dating of the option.

(To learn more, read .) In short, it is this failure to disclose - rather than the backdating process itself - that is the crux of the options backdating scandal. To be clear, the majority of public companies handle their employee stock options programs in the traditional manner.