Corporate governance and backdating of executive stock options
CII's corporate governance policies were last updated on September 30, 2016. 1.5 Shareowner Participation: Shareowners should have meaningful ability to participate in and vote on the major fundamental decisions that affect corporate viability, and meaningful opportunities to suggest or nominate director candidates and to suggest processes and criteria for director selection and evaluation.Full CII Corporate Governance Policies (downloadable PDF) 1. 1.6 Business Practices and Corporate Citizenship: CII believes companies should adhere to responsible business practices and practice good corporate citizenship.The pattern was somewhat more common in technology companies, smaller companies, companies granting options to more executives and directors, and companies with higher stock price volatility.Volatility is especially significant: 29% of companies with high volatility appear to have manipulated grant dates, compared to 13% of those with low volatility.Plaintiffs’ counsel found that the likelihood of Costco’s board landing on these options grant dates by chance was over 1 in 1 million—which is to say, less likely than your being killed in an extinction-level asteroid impact in your lifetime, but more likely than your winning a multi-state Powerball.For right now, though, it will be sufficient just to look at some of the fortuitous option dates chanced upon while Ben Carson was on Costco’s board of directors: They just look lucky, don’t they? Carson himself allegedly personally benefited from the falsified options.Your Trading Costs" data-cycle-title="You Could Reduce Your Trading Costs" data-cycle-desc="Razor sharp spreads only seen in the interbank market starting from 0.0 pips.
1.4 Accountability to Shareowners: Corporate governance structures and practices should protect and enhance a company's accountability to its shareowners, and ensure that they are treated equally.); and, perhaps most distressingly, The Cheesecake Factory—all these firms and more found themselves under SEC scrutiny, alongside Costco, for the clear statistical evidence of stock options backdating.In the Costco case, the lawyers for Pirelli’s retiree benefits trust (and Daniel) used no less than six court-accepted methodologies, including in their 2006 investigations into options backdating. District Attorney's Office has also issued several subpoenas in launching a criminal probe. The typical practice was to record a felicitously timed prior date as the grant date, such as the point when the stock had been at its lowest in recent months, instead of the date when the award was actually granted. Nejat Seyhun of the University of Michigan for the newspaper showed that that options granting practices between 20 often failed to comply with the Sarbanes-Oxley requirement that grants of awards to executives be reported within two days of board approval (T"he Dating Game: Do Managers Designate Option Grant Dates to Increase Their Compensation? Prior research at Erik Lie at the University of Iowa found a pattern of probable options backdating in a number of companies prior to 2002.