By Lisa Smith Updated Jan 8, 2018 In the mid-2000s, an investigation by the Securities backdating options scandal Exchange Commission resulted in the resignations of more than 50 senior executives and CEO s at firms across the spectrum from restaurant chains and recruiters to home builders and health care. What was it all about? Options backdating. Read on to find out how the scandal emerged, what backdating options scandal it to and end and what you can learn from it now.
In this way, the exercise price of the granted option can be set at a lower price than that of the company's stock at the granting date. This process makes the granted option "in the money" and of value to the holder. Companies would simply wait for a period in which the company's stock price fell to a low and then moved higher within a two-month period.
Opinions expressed by Forbes Contributors are their own. Share to facebook Share to twitter Share to linkedin In one of the Steve Jobs obituaries there is this reference to the backdated options scandal at Apple. In 2001 he was granted stock options amounting to 7. In 2006 an internal company inquiry found that this grant was "improperly recorded" as having been made at a special board meeting that never took place, but largely exonerated Jobs over the matter, saying that the options had been returned without being exercised and that he was "unaware of the accounting implications".