This practice of changing the so-called date that the option was granted to the employee is called "backdating," and is illegal.
Companies generally use stock options as an incentive to the employees.
Multiply this by millions of options granted over a number of years and we’re talking about big money.
Also, back-dating makes it more likely the options will be profitable even if the company doesn’t do very well, undermining the incentive they are supposed to provide.
When there’s only one candidate, he is assured of winning even if a majority of shareholders vote against him.
Washington should eliminate the obstacles that make it virtually impossible for shareholders to field their own candidates.
That will not be fixed until Washington reforms the corporate elections system, which typically offers only one nominee per available board seat a person chosen by the board itself.
Angry shareholders can vote against the board’s nominees, but this has little effect since most companies simply seat the candidate who gets the most “yes” votes.
The fixed price at which an employee can purchase stock is supposed to be whatever the selling price was on the day that the option was made available to them.
However, some companies manipulated this data by creating documentation to make it look as though the option was granted on a day when the price was very low.
What’s wrong with this practice and what’s to be done about it?