Backdating of stock option grants being the rebound in dating

If the compensation expense is not properly reflected in earnings, the company’s financial statements will be inaccurate and restatement of the financials may be required.The discovery of past backdating practices may raise issues as to the adequacy of the company’s internal controls and disclosure controls and procedures.

An option granted at less than fair market value will also not qualify as “performance based compensation” and thus must count toward the

An option granted at less than fair market value will also not qualify as “performance based compensation” and thus must count toward the $1 million executive compensation deduction cap under Section 162(m) of the Internal Revenue Code.

Grants to new employees based on inaccurate employment commencement dates are troublesome.

Options granted as of the commencement of employment based on the market price as of the date of acceptance may be problematic if the plan does not permit below-market grants or the grant is not treated as a discounted option for accounting and tax purposes.

Before FAS 123R, generally only options granted below fair market value resulted in any compensation expense.

After 123R, the “fair value” of discounted options will be greater than the “fair value” of comparable undiscounted options, resulting in higher compensation expenses.

Civil and criminal authorities are investigating the option granting practices of many companies.

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An option granted at less than fair market value will also not qualify as “performance based compensation” and thus must count toward the $1 million executive compensation deduction cap under Section 162(m) of the Internal Revenue Code.Grants to new employees based on inaccurate employment commencement dates are troublesome.Options granted as of the commencement of employment based on the market price as of the date of acceptance may be problematic if the plan does not permit below-market grants or the grant is not treated as a discounted option for accounting and tax purposes.Before FAS 123R, generally only options granted below fair market value resulted in any compensation expense.After 123R, the “fair value” of discounted options will be greater than the “fair value” of comparable undiscounted options, resulting in higher compensation expenses.Civil and criminal authorities are investigating the option granting practices of many companies.

million executive compensation deduction cap under Section 162(m) of the Internal Revenue Code.Grants to new employees based on inaccurate employment commencement dates are troublesome.Options granted as of the commencement of employment based on the market price as of the date of acceptance may be problematic if the plan does not permit below-market grants or the grant is not treated as a discounted option for accounting and tax purposes.Before FAS 123R, generally only options granted below fair market value resulted in any compensation expense.After 123R, the “fair value” of discounted options will be greater than the “fair value” of comparable undiscounted options, resulting in higher compensation expenses.Civil and criminal authorities are investigating the option granting practices of many companies.

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