Backdating stock options definition

Posted by / 05-Nov-2019 15:11

Backdating stock options definition

But backdating options allows companies to set an exercise price that's lower than the current value of the company's stock.

For instance, if the board meeting is on January 3, 2012, and Company XYZ stock closes at per share that day, then the exercise price of John's 2012 stock are backdated, then his exercise price is only per share.

Option backdating scandals: how management accountants can help: backdating of employee stock options can have a significant negative effect on a public company.

grants to one that is earlier than the actual grant date in order to place a lower exercise price on the options and thus enhance the potential profits from the exercise of those stock options.

idfubar (talk) , 14 December 2009 (UTC) "Options backdating is the practice of issuing options contracts on a later date than which the options have listed." This does not seem to clearly define backdating.

I have a decent understanding of financial options, and I cannot figure out what it means from this sentence.

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The general reason companies backdate options is to create a lower exercise price, which in turn increases the probability that exercising the options will make more money for the optionee.

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