Backdating executive dating someone older in age
For example, if one signs a contract on February 1, one may backdate it to January 31.
Backdating is usually illegal; for example, one may use backdating to evade taxes.
The intent of backdating option grants is to award disguised "in-the-money" options.
This allows the option recipient potentially to realize larger eventual gains, but still characterize the options as having been granted "at-the-money." We have also learned that employees, including executives, may at times have backdated option exercises.
Option backdating scandals: how management accountants can help: backdating of employee stock options can have a significant negative effect on a public company.
by Linda Thomsen Director, Division of Enforcement U. Securities and Exchange Commission Chairman Grassley, Ranking Member Baucus, and Members of the Committee: I.
Recently, in fact, the Commission and the Department of Justice jointly announced the filing of two enforcement actions concerning backdating.
The act of dating a document before the date it was actually signed.While each of us has different law enforcement responsibilities, backdating can impact criminal and tax laws as well as the federal securities laws.Because of this, I want to assure the Committee that the SEC's Enforcement staff has been sharing information with the Department and the Service as warranted and appropriate.This practice involves misrepresenting the date an option is exercised to make it appear that the exercise occurred at an earlier date - and at a lower price - than when the exercise actually occurred.Both of these practices - backdating grants, and backdating option exercises - have tax implications. Backdating Stock Option Grants Under the federal tax laws, grants and exercises of stock options can have income tax consequences to companies and individuals alike.
Unlike the exercise of NSOs, incentive stock options, or ISOs, afford employees favorable tax treatment because any gain at exercise is not taxed as ordinary income, although the gain may be subject to alternative minimum tax.